- The High Court of Singapore recognizes cryptocurrency as property that can be held in trust, blurring the distinction between digital and physical assets.
- The ruling emerged from a case involving Bybit and a former employee, marking a significant step forward in defining the legal status of digital assets.
In a groundbreaking ruling on July 25, Judge Philip Jeyaretnam of the High Court of Singapore established that cryptocurrency is property and can be held in trust. Jeyaretnam clarified that he discerns no difference between crypto, fiat money, or any other objects, whether physical or not, as long as they hold value fostered by mutual trust.
Intrinsic Value in a Digital Era
The verdict came out of a lawsuit filed by cryptocurrency exchange, Bybit, against its ex-employee, Ho Kai Xin. Bybit alleged that Ho had transferred approximately 4.2 million Tether (USDT) from the exchange to her private accounts. The court subsequently ordered Ho, who blamed the transfers on a non-present cousin, to return the funds to Bybit.
This ruling may seem straightforward, but it carries significant implications for the legal status of digital assets. Jeyaretnam characterized the illicitly transferred USDT, and cryptocurrencies in general, as property. Refuting common misconceptions around cryptocurrencies lacking “real” value, the judge stated,
“We identify what is going on as a particular digital token, somewhat like how we give a name to a river even though the water contained within its banks is constantly changing.”
Further dissecting the nature of value, Jeyaretnam reminded us that it is
“a judgment made by an aggregate of human minds.”
He categorized cryptocurrency among “things in action,” a British common law term denoting property over which personal rights can be legally claimed or enforced, not merely by physical possession.
Implications for Digital Asset Custody and Legal Frameworks
In delivering his verdict, Jeyaretnam referenced a consultation paper by the Monetary Authority of Singapore (MAS) outlining the segregation and custody requirements for digital payment tokens. He stated that if it is practically feasible to identify and segregate such digital assets, it should be legally possible to hold them in trust.
The judgment mentions Order 22 of Singapore’s Rules of Court 2021, which includes “cryptocurrency or other digital currency” within its definition of “movable property.”
This ruling follows a May 2022 verdict by the High Court of Justice in London, which determined nonfungible tokens (NFTs) as “private property.” Industry experts hailed the decision as a significant precedent for NFT investors seeking legal protection of their property rights.