SINGAPORE Law and Practice Contributed by: Tju Liang Chua and Ulanda Oon, Drew & Napier LLC
Enforcement of Property Rights Over Digital Assets From an enforcement perspective, in relation to a claim over stolen cryptocurrencies, the SGHC, in CLM v CLN and others [2022] SGHC 46, granted a propri- etary injunction and a worldwide freezing injunction to prevent the dissipation of allegedly stolen cryptocur- rencies against unidentified persons believed to have participated in or assisted with the alleged theft. The Court also ordered two cryptocurrency exchanges to provide information and documents relating to the accounts that were credited with some of the alleg- edly stolen cryptocurrencies. Similarly, on 13 May 2022, the SGHC in Janesh s / o Rajkumar v Unknown Person (“CHEFPIERRE”) [2022] SGHC 264 (the “Janesh case”) issued a worldwide proprietary injunction to block any potential sale and ownership transfer of a unique Bored Ape Yacht Club NFT (BAYC No 2162) (BAYC NFT) against an unknown person known as “Chefpierre”. Following an applica- tion by Rajkumar, the Court granted the worldwide proprietary injunction. At the time of writing, this The use of digital assets as security has not been explored in case law, legal precedent or legislation in Singapore. Nevertheless, following the approach of the SGCA in the Quoine case, it is anticipated that security over digital assets will be determined by anal- ogy to other assets. Traditional common law forms of security interests such as assignments, mortgages, charges and pledges may therefore be considered. Assignments, mortgages or charges could all be applicable to digital assets categorised as securities or currency (when stored in online wallets). Physical digital asset wallets could also be pledged as secu- rity, to the extent that these physical wallets can be considered goods or personal chattels. 1.2.2 Access to Banking There are no express regulatory restrictions under the PS Act on which banks or payment partners a digital payment token service provider (DPTSP) may use for its general, day-to-day banking needs. However, spe- injunction remains uncontested. Use of Digital Assets as Collateral
cific regulatory requirements effectively constrain the choice of partners for certain critical functions. Under the PS Act, a major payment institution licensee providing a DPT service is required to safeguard rel- evant money received from, or on account of, custom- ers by either procuring an undertaking or guarantee from a bank in Singapore or a prescribed FI, or depos- iting the funds into a trust account maintained with such an institution. This means that the safeguarding partner must be a qualifying institution located in Sin- gapore; an offshore bank or unregulated entity would not satisfy this requirement. Separately, DPTSPs licensed under the PS Act are subject to consumer protection measures introduced in October 2024, which oblige them to segregate cus- tomers’ assets (fiat and DPTs) from their own assets and place them in trust accounts for the benefit of customers. Where a DPTSP chooses to engage a safeguarding person located outside of Singapore, it must be satisfied that the safeguarding person meets the standards set out in the Payment Services Regula- tions and the Guidelines on the Provision of Consumer Protection Safeguards by Digital Payment Token Ser- vice Providers. The broader regulatory trajectory in Singapore points towards licensed DPTSPs being required to maintain relationships with qualifying FI, particularly for the safeguarding of customer money. The MAS has also confirmed that there are no rules preventing banks from doing business with DPTSPs. As Singapore’s licensing regime matures and provides greater regu- latory certainty, this may in turn encourage banks to reassess their risk appetite for servicing firms provid- ing digital asset services. 1.2.3 ESG/Sustainable Finance At the time of writing, there is no ESG/sustainable finance-specific legislation that applies to digital assets in Singapore. 1.2.4 Tax Taxation matters in relation to use of blockchain or cryptocurrencies are covered under existing tax leg- islation in Singapore, principally the Income Tax Act (ITA) and the Goods and Services Tax Act (GSTA). The
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