24 November 2023

In the recent case of ByBit Fintech Ltd v Ho Kai Xin & Ors [2023] SGHC 199, the General Division of the Singapore High Court (“High Court”) considered whether the cryptocurrency stablecoin known as “Tether” (“USDT”) constitutes property that is capable of being held on trust. This decision concerned the claim by ByBit FinTech Ltd (“ByBit”) that Ho Kai Xin (“Ms Ho”) had abused her position of employment to wrongfully transfer large amounts of USDT to cryptocurrency wallets secretly controlled by her.

In finding that a holder of USDT has an intangible proprietary right (also known as a “chose in action”) that is enforceable in court, the High Court follows in the footsteps of several other “crypto-friendly” decisions that it has handed down this year. These decisions are indicative of the commercially-oriented and principles-based approach that the Singapore courts appear to be adopting with respect to cryptocurrency, and reveal the Singapore courts’ willingness to consider how cryptocurrency can fit into established legal concepts.


Ms Ho was an employee of WeChain Fintech Pte Ltd and was responsible for the payroll processing of ByBit’s employees. ByBit remunerated its employees through fiat currency, cryptocurrency, or a mixture of both. As part of her duties, Ms Ho maintained a set of Excel spreadsheets tracking the transfer of fiat currency and cryptocurrency payments to employees. These spreadsheets contained cryptocurrency wallet addresses designated by ByBit employees for the purpose of receiving their remuneration.

ByBit subsequently discovered that a total of 4,209,720 USDT (“Crypto Asset”) had been transferred to four cryptocurrency wallets (each with its own address) (“Wallets”) by Ms Ho. The Excel spreadsheet that Ms Ho was in charge of maintaining had been amended to incorrectly reflect the addresses of the Wallets as belonging to certain ByBit employees. Ms Ho was unable to satisfactorily explain these transactions to ByBit. ByBit’s investigations revealed that Ms Ho had sent herself an email containing all four wallet addresses to which the Crypto Asset had been transferred. Further investigations also revealed that Ms Ho had engaged in a luxury spending spree contemporaneously with the suspicious transactions. Finally, ByBit obtained information from the service provider of a wallet associated with one of the four addresses, that indicated that Ms Ho owned the wallet associated with that address. Amounts transferred into wallets associated with the other addresses were also later transferred into this wallet.

Ms Ho’s defence was that although she accepted that the Crypto Asset belonged to ByBit and she was not entitled to the same, the Wallets were actually controlled by her cousin, one Mr Jason Teo (“Jason”). Ms Ho averred that she did not have access to any of the Wallets and had no record of her correspondence with Jason. Ms Ho claimed that Jason had accessed her work laptop without her knowledge or consent, and amended the Excel sheets, resulting in the Crypto Asset being transferred to the Wallets without her involvement.

In response, ByBit submitted that:

  • The Crypto Asset was comprised of choses in action and was therefore property capable of being the subject matter of a constructive trust.
  • Ms Ho held the Crypto Asset on constructive trust for ByBit.

Decision of the High Court

The High Court observed that crypto assets can be transferred for value and represent value when held on companies’ balance sheets. It was also observed that the Rules of Court 2021 define “movable property” to include cryptocurrency. The High Court further found that cryptocurrency met the four common law requirements to be classified as property as set out in the locus classicus of National Provincial Bank v Ainsworth [1965] 1 AC 1175: (1) it was definable, (2) it was identifiable by third parties, (3) it was capable in its nature of assumption by third parties, and (4) it had some degree of permanent stability. 

After deciding that cryptocurrency was a form of property, the High Court then turned to consider whether it could be classed as a chose in action, i.e. dealing with the question of what kind of property cryptocurrency was. The High Court found that, notwithstanding that choses in action were traditionally defined as rights enforceable in court, and that there was no individual counterparty to the right possessed by a cryptocurrency holder, a holder of a crypto asset had an incorporeal right of property recognisable as a chose in action by the common law, which was enforceable in court.

The High Court supported its conclusion by observing that the category of choses in action was broad, flexible, and not closed. In fact, the category of choses of action had expanded over time to include documents of title to incorporeal property rights, and even to incorporeal property rights themselves, e.g. copyright. Finally, the High Court noted that while the holder of USDT had a contractual right to redeem USDT for fiat currency that was enforceable against Tether Limited, that contractual right was not in itself necessary for its conclusion that a holder of USDT had a chose in action.

The High Court therefore declared a constructive trust over the Crypto Asset in favour of ByBit, which meant that ByBit was the legal and beneficial owner of the Crypto Asset, notwithstanding that the Crypto Asset had been transferred out to Ms Ho’s Wallets.

Practical impact

The key takeaway for parties holding crypto assets is that USDT - and likely other stablecoins - have now been recognised by the Singapore courts as property. The implication of this is that the full range of proprietary remedies (e.g. equitable liens, subrogation, constructive trusts) is potentially available to innocent parties in respect of such stablecoins in the event of fraud or similar wrongdoing. This decision also clarifies that cryptocurrencies can be the subject of a trust, which suggests that they can be understood analogously to more traditional financial assets, and likely to help ease their integration into the existing financial system.

Significance of this decision in context

This decision is significant in providing the greatest clarity yet from the Singapore courts on the nature of the legal right a cryptocurrency holder has. This decision is the most recent in the line of several other Singapore court decisions stating that cryptocurrency amounts to property in various contexts, or that cryptocurrency has certain characteristics typically associated with traditional categories of property.

In recent years, the Singapore courts have gone from merely suggesting that cryptocurrencies may amount to property (B2C2 Ltd v Quoine Pte Ltd [2019] 4 SLR 17), to finding that cryptocurrencies fulfilled the four requirements to be classified as property as set out in Ainsworth (CLM v CLN [2022] SGHC 46 - albeit only on a prima facie basis in the context of deciding whether cryptocurrencies could be the subject of a proprietary injunction), and to assuming without further analysis that crypto assets in custodial wallets amounted to matrimonial assets that could be divided (VOW v VOV [2023] SGHCF 9).

In the larger context, this welcome decision could also be characterised as being part of a broader “crypto-friendly” trend in Singapore court decisions that has been gathering traction for some time. Some examples of relevant cases in 2023 include the following:

  • In Re Babel Holding Ltd and other matters [2023] SGHC 98, the High Court granted confidentiality orders anonymising the name of the Babel Group’s creditors. This is significant because several cryptocurrency restructuring or insolvency filings have led to a contagion effect (otherwise also known as a “knock-on” or “spillover” effect). If the names were not anonymised, the market may adversely view customers listed as having significant exposure to the group, thus causing a “run” on those cryptocurrency players and/or investors by their own creditors. The court also granted five applications by entities in the Babel Group for moratoria suspending adverse creditor actions against the Babel Group, to give the group more time to implement a restructuring plan for its estimated US$1.5 billion liabilities worldwide. The restructuring plan included a novel method of recovery involving the conversion of creditor claims to tokens issued by Babel Finance. These tokens will be tradable on the secondary market and will be backed by new investors and a new business model. Singapore was chosen by the Babel Finance Group as the centre from which the worldwide restructuring will be run. For more information about this decision, please read our article titled “Cryptocurrency group granted moratoria to formulate a worldwide restructuring plan centred in Singapore”.
  • In Rio Christofle v Tan Chun Chuen Malcolm [2023] SGHC 66, the High Court expressly clarified that section 5 of the Payment Services Act 2019 does not explicitly or impliedly prohibit contracts relating to the sale and purchase of cryptocurrency.
  • In Re Genesis Asia Pacific Pte Ltd and other matters [2023] SGHC 240, the High Court granted orders recognising and giving assistance to the Genesis Group’s proceedings under Chapter 11 of the United States Bankruptcy Code 11 USC (US) (1978), including moratorium orders in support of the Chapter 11 plan that the Genesis Group sought to pursue.

Allen & Gledhill acted for the successful applicants in both the Babel and Genesis cases above. Parties dealing with cryptocurrencies and players in the emerging blockchain space may therefore remain cautiously optimistic that the Singapore courts are likely to take a pragmatic and commercially-oriented approach in applying well-established legal principles to the novel facts presented by the increasing use and adoption of cryptocurrencies, and in supporting restructurings - even novel restructurings - of cryptocurrency companies in Singapore and worldwide.

Reference materials

The judgment is available on the Singapore Courts website www.judiciary.gov.sg.