Singapore High Court recognizes cryptocurrency as property for the first time in theft case ruling

Singapore’s High Court, a lower court than the country’s Supreme Court, has issued a ruling in which it recognizes cryptocurrencies as property for the first time and grants a proprietary injunction against someone suspected of stealing them.

On March 24, foreign media reported that in a case involving the theft of Bitcoin and Ethereum, with an estimated total value of US$7 million, the court required two unnamed cryptocurrency exchanges to store the stolen crypto assets in order to provide judicial authorities with material assets that can be traced.

The international law firm Lawyers noted that the court’s ruling marks a positive development for the crypto industry as it shows that courts in the Southeast Asian country are “prepared to recognize and protect cryptocurrencies as property by granting exclusive injunctions against cryptocurrency theft, even when the identity of the perpetrator is unknown.”

Among other things, the latest ruling also shows that Singapore courts are ready to issue disclosure orders against cryptocurrency exchanges established or operating in the country, enabling victims of crypto asset theft or fraud to access important information that can help them freeze and track stolen crypto assets.

Lawyers say such court orders would effectively overturn any contractual terms between a cryptocurrency exchange and its users. For cryptocurrency exchanges based in or doing business in Singapore, the decision means it is now possible to receive a disclosure order from a Singapore court to reveal information related to user accounts, as well as an injunction to freeze cryptocurrency held in user accounts.

In fact, Singapore has been relatively relaxed about crypto innovation. As global regulators, including the United States, the United Kingdom and China, tighten regulations, Singapore is becoming a safe haven for the crypto industry. Currently, Singapore has not issued licenses to cryptocurrency companies, but has temporarily granted exemptions to some large companies so that they can serve local retail and institutional investors. The country's sovereign wealth fund GIC and state-owned investment company Temasek have invested hundreds of millions of dollars in the crypto field. The Monetary Authority of Singapore (MAS) makes it easier for foreign cryptocurrency groups to settle and conduct business.

It is worth mentioning that data shows that Singapore's investment in the cryptocurrency and blockchain industry jumped more than 10 times in 2021, reaching a record high, consolidating Singapore's position as a crypto hub. There were 82 transactions last year with a total value of US$1.48 billion, compared with US$110 million in 2020. The report said that most cryptocurrency and blockchain transactions last year targeted software and underlying infrastructure rather than services. At the same time, KPMG expects that crypto investment in Singapore will remain strong this year even with increased regulation.