In a landmark ruling on July 25, Judge Philip Jeyaretnam of the High Court of Singapore declared that cryptocurrencies, including the contentious Tether (USDT), should be classified as personal property. The ruling was delivered in response to a case filed by Bybit against its former employee, Ho Kai Xin, who was accused of transferring approximately 4.2 million USDT from the exchange to her private accounts. The court has now ordered Ho to return the money to Bybit, despite her claims that the accounts were controlled by a non-present cousin.
Notably, Judge Jeyaretnam addressed the issue of whether cryptocurrencies hold real value. He firmly dismissed the common skepticism surrounding the worth of digital assets, emphasizing that value is a subjective perception derived from collective human belief. He likened cryptocurrencies, fiat money, and even shells, to which value is ascribed through mutual faith, thus equating their status as property.
In the legal context, the judge classified cryptocurrencies as "things in action," following British common law principles. This classification means that cryptocurrencies can be considered property with enforceable personal rights, even in the absence of a physical form or possession.
The ruling cites a consultation paper by the Monetary Authority of Singapore (MAS) that proposes implementing segregation and custody requirements for digital payment tokens. Judge Jeyaretnam referenced this paper to affirm that if it is feasible to identify and segregate digital assets, holding them under trust would be legally permissible.
The decision is significant as it recognizes cryptocurrencies, including USDT, as property under Singapore's Rules of Court 2021. The court defines "movable property" to encompass various assets such as cash, debts, securities, and even cryptocurrency or digital currency.
This ruling aligns with a similar precedent set by the High Court of Justice in London in May 2022, which declared non-fungible tokens (NFTs) to be "private property." The decision was celebrated by experts as it provided reassurance to NFT investors, safeguarding their property rights under British law.
As the adoption and use of cryptocurrencies continue to expand globally, the Singapore High Court's ruling represents a significant step in establishing a clearer legal framework for digital assets, bolstering investor confidence and protection in the digital economy.