Singapore Court Ruling Sets Precedent for Bybit and Investors

Key Points:

• High Court of Singapore recognizes cryptocurrencies as property held on trust.
• Contractor accused of breaching employment contract by transferring over 4.2 million USDT and fiat currency to personal account.
• Judge states that digital assets can be identified, segregated, and held on trust like any other thing in action, with an incorporeal right of property enforceable in court.

High Court of Singapore has recognised cryptocurrency as property that can be held on trust.

This landmark ruling was made in a case involving Seychelles-based exchange Bybit and a contractor, Ho Kai Xin, who was accused of breaching her employment contract by transferring over 4.2 million USDT, a stablecoin issued by Tether, to her own addresses. In addition, she also transferred a significant amount of fiat currency to her personal bank account.

Philip Jeyaretnam, stated that USDT can be held on trust just like any other thing in action. He also referred to a public consultation response published by the Monetary Authority of Singapore on 3 July 2023, which confirmed that digital assets can be identified and segregated, thereby supporting the view that they can be held on trust.

Furthermore, the judge recognised that the holder of a cryptocurrency has an incorporeal right of property that is enforceable in court. This right of property is recognised as a thing in action, and although it may have an “element of circularity” about it, it is similar to how the law approaches other social constructs, such as money.

The judge also acknowledged that the value of crypto assets is not inherent in the object itself, but rather in the exchange value that people generally accept. He stated that while some people may be sceptical of the value of cryptocurrency, it is important to keep in mind that value is not intrinsic to an object.

Bybit sought a declaration that Ho was holding both the USDT and fiat currency on trust for the exchange. However, Ho claimed that her cousin Jason Teo had stolen the assets from ByBit without her knowledge, and that he was the one who owned and controlled the addresses in question. The judge ultimately accepted that Jason did not exist, and ordered Ho to transfer the assets back to Bybit.

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