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Cryptocurrency is recognized as property by Singapore Court 

Cryptocurrency

Unknown Persons Stole S$9.6 Million Worth of Cryptocurrency

The plaintiff in CLM v CLN [2022] SGHC 46 commenced an action to trace and recover 109.83 Bitcoin and 1497.54 Ethereum that were allegedly misappropriated from him by unidentified persons, a portion of which had been traced to digital wallets that were controlled by cryptocurrency exchanges with operations in Singapore.

The General Division of the Singapore High Court (“Court“) ultimately held that cryptocurrency could be classified as property that could be protected via proprietary injunctions. In addition, the Court granted the first reported freezing injunction against persons unknown in Singapore for SGD 9.6 million worth of cryptocurrency assets stolen from the plaintiff.

Key Points

  • As the identity of the first defendants was unknown at the time of the filing and hearing of the injunction application, the preliminary issue was whether the Court had the jurisdiction to grant interim orders. The Court agreed that it had the requisite jurisdiction to do so but stressed that the description of such unknown persons had to be sufficiently certain. This was satisfied in this case.
  • The Court found that cryptocurrencies satisfied the definition of a property right in the classic definition of a property right in National Provincial Bank Ltd v Ainsworth [1965] AC 1175 (“Ainsworth“) and so were capable of giving rise to proprietary rights which could be protected by a proprietary injunction. Further, the balance “clearly lay in favour of granting” the injunction as there was a real risk of dissipation of the stolen cryptocurrency. The Court granted the proprietary injunction on this basis.
  • The Court, in granting an additional worldwide freezing injunction to restrain the first defendants, observed that the risk of dissipation was heightened by the very nature of cryptocurrency, which could “be easily dissipated and hidden in cyberspace”.
  • The decision ultimately indicates that greater protection may be afforded to cryptocurrencies as property in Singapore. read more

Source: Andy Leck, Ken Chia, Ren Jun Lim, Arwen Berry and Abe Sun | Baker McKenzie

Litigation Edge Singapore