In a landmark decision delivered on July 25, the High Court of Singapore presided over by Judge Philip Jeyaretnam, declared that cryptocurrency can be held in trust, equating it to tangible property. The judge elucidated that there is no perceptible difference between cryptocurrency, conventional currency, or shells, provided these objects share a mutually acknowledged value.
The decision was made in a case involving Bybit, a cryptocurrency exchange, and its former employee, Ho Kai Xin. Bybit had accused Ho of illicitly transferring around 4.2 million Tether (USDT) from the exchange to her personal accounts. After considering the evidence, the court ordered Ho, who blamed a non-present cousin for controlling the implicated accounts, to reimburse the funds to Bybit.
Relevance of the Verdict
While the ruling might seem straightforward, it encompasses vital points concerning the legal status of digital assets. In his judgment, Jeyaretnam equated the pilfered USDT and, by extension, all cryptocurrencies to property. He contested the prevalent skepticism surrounding crypto’s intrinsic worth, stressing that value is a judgment collectively determined by human minds.
The judge further classified cryptocurrency as “things in action,” according to British common law. This classification signifies a type of property for which personal rights can be claimed or enforced via legal action rather than by claiming physical ownership.
Influence of Monetary Authority of Singapore (MAS)
Judge Jeyaretnam’s decision included references to a consultation paper issued by the Monetary Authority of Singapore (MAS). The paper highlights the forthcoming segregation and custody requirements for digital payment tokens. If it is operationally feasible to identify and segregate such digital assets, it should also be legally possible to hold them in trust, according to the Judge.
A Growing Trend
This ruling is consistent with the evolving global perspective towards digital assets. In May 2022, the High Court of Justice in London established that nonfungible tokens (NFTs) represent private property. This judgment was hailed as a great precedent for NFT investors, reinforcing their property rights.