Judge Philip Jeyaretnam ruled in a case brought by cryptocurrency exchange Bybit against its former employee Ho Kai Xin, who transferred about 4.2 million USDT from the exchange to her personal accounts. The defendant claimed that her cousin controlled the accounts, but the court ordered the woman to return all crypto assets to the ByBit exchange.
The decision contains language important to the legal status of digital assets. Singapore judge calls USDT stablecoins and cryptocurrencies property. And he explained: even though cryptoassets are not categorized as physical assets, they can be owned in the same way that cars or jewelry can be owned. As the judge put it, cryptoassets manifest themselves in the physical world in a form that humans are unable to perceive.
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“Cryptocurrencies manifest themselves physically at the level of digital bits and bytes, constantly changing. They can be identified as a specific digital marker. Sort of like how we name a river even though the water in its banks is constantly changing,” the judge explained.
Philip Jeyaretnam acknowledged that many people are skeptical about the value of cryptoassets, but clarified: the value of an object is determined by the totality of human minds and depends on specific circumstances. The judge gave an example: a wooden chair floating in the sea can be of far greater value than a golden throne on a sinking ship.
In his ruling, the judge referred to the Monetary Authority of Singapore’s (MAS) consultation paper, which outlines the requirements for ranking and storing digital payment tokens. The judge explained: if it is practically possible to sort digital assets, then it is legally possible to hold them in trust. The court’s judgment also referred to Singapore High Court Order No. 22 of 2021, which states that cash, debts, cash deposits, bonds, shares or other securities, membership of clubs or societies, and cryptocurrencies and digital currencies can be considered movable property.
In October 2022, the Singapore High Court recognized non- fungible tokens (NFTs) as objects of property, explaining that ownership of collectible tokens can be verified by third parties.