Singapore Court rules that crypto is property

The Singapore High Court has ordered a woman who transferred millions of dollars in cryptocurrency from crypto exchange Bybit to return the sums to the company.

Ms Ho Kai Xin, who handled the payroll for Bybit, abused her position to steal US$4.2 million of the stablecoin USDT to addresses owned and controlled by her. She also transferred fiat currency into her own bank account.

Bybit discovered the theft in September last year, when they noticed eight unusual cryptocurrency payments made between May and August of that year. Ho was confronted with investigation findings in October, and told Bybit that the addresses belonged to her cousin, and that he asked her to help make the transfers.

Ho had used the money to buy a penthouse apartment, a new car, as well as other luxury goods.

In a landmark decision, Judge Philip Jeyeratnam ruled that ‘like any other thing in action, USDT is capable of being held on trust.’ The judge also stated that ‘the holder of a crypto asset has in principle an incorporeal right of property recognisable by the common law as a thing in action and so enforceable in court.’, and that it is ‘not strikingly different from how the law approaches other social constructs, such as money.’

“It is only because people generally accept the exchange value of shells or beads or differently printed paper notes that they become currency,” Jeyaretnam said.

“While some people are sceptical of the value of crypto assets, it is worth keeping in mind that value is not inherent in an object,” he added.

A step forward for Web3

While this is the first time that cryptocurrencies have been ruled to have property rights in Singapore, this is not the first win for the Web3 and crypto communities.

Last year saw another landmark case where the Singapore Supreme Court ruled that NFTs were considered assets.

The NFT in question was from the massively popular Bored Ape Yacht Club (BAYC) series, a collection of NFTs on the Ethereum blockchain. This collection has seen interest from numerous high profile celebrities, including Justin Bieber and Steve Aoki.

In this case, the court upheld a claim by Singaporean Janesh Rajkumar that the NFT, as a digital asset, should be afforded legal protection as property.

The court then issued an injunction blocking further sale of the NFT, and OpenSea, where the NFT was already listed for sale, marked the NFT as ‘reported for suspicious activity’.

Since then, the BAYC case has been seen as a significant step forward in recognising that digital assets are assets in the legal sense as well.

With this new ruling, digital assets like cryptocurrency are also given legal recognition, and this can go a long way towards ensuring security for the crypto community. Thus far, crypto assets have not always had a clear legal status.

The new ruling, however, would mean that at least in Singapore, legal protections can be afforded to cryptocurrencies and crypto assets on the basis that people believe that these things are valuable. Enforcement action based on such a precedent would also mean that crypto users now have some form of legal recourse when their cryptocurrencies are stolen.

Given how common crime in the crypto space is, this could mean bringing many more people into the Web3 space, as they feel more secure that not only the ability to use crypto as money, but also that law enforcement agencies are able to help them when they have been a victim of scams or thefts.

This victory is, therefore, not merely a victory for Bybit in the sense that they will be able to recover the money that was stolen, but also a victory for the Web3 space as a whole- and this is perhaps something worth celebrating.