Digital Currencies Secure Legal Recognition. Singapore Judgment upholds Asset Status
In an exhilarating turn of events, Judge Philip Jeyaretnam of Singapore's High Court awarded cryptocurrencies a new status on July 25, 2021. This groundbreaking decision came about as a result of a lawsuit brought against Ho Kai Xin, a former employee of Bybit, suspected of moves to transfer nearly 4.2 million Tether (USDT $1.00) from the cryptocurrency exchange to her personal accounts. With this ruling, cryptocurrencies were recognized as a form of property, much like physical items, as long as they retain their value derived from a shared confidence in them. This means Ho was ordered to refund the money to Bybit.
Delineating the Roadmap for Digital Assets
The decision of Judge Jeyaretnam carries significant weight in the world of digital assets, shedding light on their legal standing. The judge made a striking analogy between bitcoins and digital tokens and the naming of a river—the value of bitcoins being more about public perception rather than its intrinsic qualities. When addressing doubts about the inherent value of cryptocurrencies, the judge emphasized that the value is largely arbitrary, determined by various people's opinions. The court further drew parallels between cryptocurrencies and "things in action" in British common law, allowing individuals to assert their rights through the judicial system without needing physical ownership.
Setting the Stage for Singapore's Cryptocurrency Ecosystem
In referencing the Monetary Authority of Singapore (MAS) consultation document, Judge Jeyaretnam pointed to proposed segregation and custody restrictions for digital payment tokens. He posited that if digital assets can be practically recognized and separated, they should be legally allowed to be held in trust. This endorsement of cryptocurrencies strengthens their legal status and places them within the financial system of Singapore more concretely.
Harmonizing with Singapore's Rules of Court
Order 22 of Singapore's Rules of Court 2021 was cited by the court, which defines "movable property" as a variety of assets, including but not limited to cryptocurrency or other digital currency. Cryptocurrencies' recognition as movable property solidifies their ability to be owned and assigned physical worth in Singapore's legal system.
Reflections on the Precedent Set for Cryptocurrencies and NFTs
The July 25 ruling resembles a landmark decision made by the High Court of Justice in London in May 2022, which recognized nonfungible tokens (NFTs) as "private property." This straightens the path for digital assets, bolstering the protection of NFT investors' property rights. The Singapore decision serves as a crucial step in the trajectory of digital assets being recognized as forms of property across the globe, potentially shaping the governance of the cryptocurrency industry in the future.
- The decision made by Judge Jeyaretnam in Singapore's High Court in July 2021 represented a significant milestone for digital assets, as it recognized cryptocurrencies as a form of property.
- This ruling echoes a similar decision made by the High Court of Justice in London in May 2022, which acknowledged nonfungible tokens (NFTs) as "private property".
- By recognizing cryptocurrencies and NFTs as forms of property, it solidifies their ability to be legally held and owned within the financial system of Singapore and potentially sets a precedent for their recognition as property across the globe.
