The High Court of Singapore, the lower division of the country’s Supreme Court, has issued a ruling in which, for the first time, it recognizes crypto as property and grants proprietary injunctions against persons suspected of its theft.
In a case involving alleged theft of bitcoin (BTC) and ethereum (ETH) with an estimated total value of USD 7m, the court has required two unnamed crypto exchanges which stored the stolen cryptoassets to provide the judiciary with materials that could allow to track down the assets.
An analysis for Lexology.com prepared by a group of lawyers from international law firm Reed Smith LLP states that the court’s decision marks a positive development for the crypto industry as,
It demonstrates that the Southeast Asian nation’s courts are “prepared to recognize and protect cryptocurrencies as properties by granting proprietary injunctions against cryptocurrency theft, even where the identity of the perpetrators is unknown.”
In addition to this, the latest decision also indicates that Singaporean courts are ready to make disclosure orders against crypto exchanges that are based or have operations in the country, enabling victims of cryptoasset theft or fraud are able to access vital information that could assist them in freezing and tracing the stolen cryptoassets.
“For cryptocurrency exchanges that are based or have operations in Singapore, this decision means that there is now a possibility of being served with disclosure orders issued by the Singapore Courts to disclose information relating to user accounts and freezing injunctions to freeze cryptocurrency held in user accounts,” according to the analysis.
The lawyers say that such court orders will effectively override any contractual terms between a crypto exchange and its users. For instance, this could apply to terms relating to the customer’s ability to transact in the crypto and the exchange’s duty of confidentiality in relation to the collected user information.