In a significant ruling on July 25, Judge Philip Jeyaretnam of the High Court of Singapore declared that cryptocurrency is a form of property that can be held in trust.
The judge emphasized that there is no essential difference between cryptocurrencies, fiat money, or even physical objects like shells, as long as they derive their value from the mutual faith vested in them.
The ruling came in response to a case brought by Bybit against its former employee, Ho Kai Xin. Bybit alleged that the employee had transferred approximately 4.2 million Tether (USDT) tokens, valued at $1.00 each, from the crypto exchange to her private accounts.
Following the court’s verdict, Ho has been ordered to return the money to Bybit, although she had claimed that a non-present cousin was in control of the relevant accounts.
While the ruling may seem straightforward, it carries essential implications for the legal status of digital assets. Jeyaretnam categorizes the stolen USDT, along with cryptocurrencies in general, as property, despite their lack of physical existence.
He likened these digital tokens to naming a river, despite the water it contains constantly changing.
This stance counters the common skepticism that cryptocurrencies lack “real” value, as the judge asserts that value is determined by collective human perception.
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Furthermore, Jeyaretnam classifies cryptocurrencies as “things in action” under British common law, implying that they are subject to personal rights enforceable through legal action, rather than physical possession.
The judge’s decision refers to the consultation paper issued by the Monetary Authority of Singapore (MAS), which proposes segregation and custody requirements for digital payment tokens.
By stating that if such assets can be identified and segregated in practice, they can be legally held in trust, the judge strengthens the legal framework for cryptocurrencies in Singapore.
Moreover, the ruling cites Order 22 of Singapore’s Rules of Court 2021, which defines “movable property” to include various forms such as cash, debt, deposits of money, bonds, shares, securities, and cryptocurrencies or digital currencies.
This judgment echoes a similar landmark ruling made by the High Court of Justice in London in May 2022, where nonfungible tokens (NFTs) were recognized as “private property.”
Such decisions set essential precedents for individuals investing in NFTs, as they provide greater assurance that their property rights will be protected by the courts.
Overall, Judge Jeyaretnam’s ruling in favor of considering cryptocurrencies as property capable of being held in trust represents a significant step forward in defining the legal status of digital assets and may have implications for future cases and regulations in the evolving landscape of cryptocurrency.
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