SINGAPORE Trends and Developments Contributed by: Jansen Chow and Ang Leong Hao, Rajah & Tann Singapore
Importantly, the Court rejected the approach adopted in the English authority of Southgate v Graham [2024] EWHC 1692, which suggested that the court was free to fix the valuation date on a date other than the date of breach if the breach-date valuation fails to adequately compensate the claimant. The Court reasoned that such an approach gives the claimant the benefit of perfect hindsight and risks unfairly conferring a wind - fall. Instead, the formulation adopted in Singapore directly ties the valuation date inquiry to the possibility and reasonableness of the claimant’s mitigation and assumes reasonable rather than best mitigation. As for the valuation method, the Court accepted that the value of cryptocurrency assets could be determined based on real-time prices from established cryptocur - rency data websites, which have also been referred to by a number of foreign and Singapore authorities. These developments demonstrate that Singapore courts will reason from established contractual prin - ciples when assessing cryptocurrency damages, rath - er than treating digital assets as requiring an entirely novel framework. Re Taylor, Joshua James and another (Official Receiver, non-party) [2025] 4 SLR 1207; [2025] SGHC 104 (“Re Taylor”) In Re Taylor, the application concerned the distribution of cryptocurrency in the liquidation of Eqonex Capital Ltd, a company that operated a digital asset exchange platform. The central question was whether the cryp - tocurrencies held by Eqonex Capital were held on trust for its customers. In analysing the platform’s terms and conditions, the Court concluded that no express, resulting or Quist - close trust had been created over the digital assets. In relation to an express trust, the Court reasoned that although certain clauses referred to digital assets as “custodial assets” held for customers’ benefit, this language did not go so far as to indicate that the assets were held on trust. Rather, the assets could have been held on a pledge or with a level of control less than a proprietary interest. Critically, the terms suggested that legal title to the digital assets was held by the customer, not merely beneficial title and an express exclusion of fiduciary and equitable duties further negated any intention to create a trust.
The Court similarly found no basis for a resulting trust as there was no express trust that had arisen and failed, or a Quistclose trust, as there was no inten - tion for the unclaimed cryptocurrencies to be repaid to customers after the platform’s closure and Eqonex was free to close the account and empty the accom - panying digital wallets. The practical consequence was that the cryptocurren - cies were not vested in Eqonex Capital as the legal and beneficial title had remained with the customers. Eqonex Capital was not entitled to the cryptocurren - cies, which meant they fell outside the general pool of assets available to the company’s creditors in liq - uidation. This decision is of considerable importance for the growing number of fraud and asset recovery cases that intersect with the insolvency of cryptocurrency exchanges. It underscores the need to pay attention to the terms and conditions governing the custody of digital assets on exchange platforms, as the trust language is crucial in determining whether custom - ers’ cryptocurrency assets are protected from creditor claims. Practitioners advising fraud victims who have lost assets through a now-insolvent exchange will need to examine the relevant platform’s terms closely to assess whether a proprietary claim or tracing rem - edy remains available. Regulatory Developments: Expanded Licensing Under the Financial Services and Markets Act (FSMA) Alongside the judicial developments surveyed above, Singapore has also expanded its regulatory frame - work for digital assets. From June 2025, the Monetary Authority of Singapore (MAS) will require digital token service providers to be licensed under Part 9 of the FSMA. The new provisions apply to individuals and partnerships that carry on a business of providing any type of digital token service outside Singapore or from a place of business in Singapore and to Singapore corporations that carry on a business of providing any type of digital token service outside Singapore, whether from Singapore or elsewhere (Section 138 of the FSMA)
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