Singapore - Market Insights

Not your keys, not your coins? How Singapore courts are redefining ownership on crypto exchanges

Ownership of digital assets: the recent Singapore landscape

It has been accepted in Singapore that digital assets are a form of property capable of being the subject matter of a trust (ByBit Fintech Ltd v. Ho Kai Xin and others [2023] 5 SLR 1748).

However, in the context of exchanges and platforms that hold digital assets of customers, it may nonetheless be difficult to establish a trust over these digital assets. As was held in Quoine Pte Ltd v. B2C2 Ltd [2020] 2 SLR 20, a lack of segregation of assets and the existence of express terms and conditions which disclaim responsibility or contradict liability associated with that of a trustee, typically militate against the establishment of a trust.

The Hong Kong decision of Re Gatecoin Ltd (in liquidation) [2023] HKCFI 914 (“Re Gatecoin”), which denied trust claims on the basis of contradictory terms and conditions, thus held that the digital assets belonged to the crypto exchange and that customers were mere creditors. The same outcome was observed in the insolvencies of FTX and Celsius.

But that does not mean that customers cannot own the digital assets held by the exchange or platform. In a recent decision of the Singapore High Court in Re Taylor, Joshua James and another (Official Receiver, non-party) [2025] 4 SLR 1207 (“Re Taylor”), it was found that, while there could not have been a trust, the digital assets and fiat currency converted from such assets held by Eqonex Capital Pte Ltd (a digital asset exchange in liquidation) still belonged to its customers and had to be returned as such. While the court found that there was sufficient segregation for the purposes of a trust, it also found that terms and conditions which reflect a custodial relationship, such as those which required the exchange to strictly deal with the digital assets on the instructions of the customers, went to demonstrate that legal title over the digital assets remained with the customers. Further, this also meant that the customers’ ownership rights could be traced into the fiat currency which was converted entirely from such digital assets.

The valuation conundrum in digital asset tracing

Even where digital assets are successfully traced, a new layer of complexity arises in quantifying the claimant’s loss or the defendant’s gain. After all, a claimant who traces stolen Bitcoin worth USD 1 million at the date of misappropriation may find those same assets worth USD 5 million or USD 200,000 by the time judgment is obtained.

In Multichain Foundation Ltd v. Fantom Foundation Ltd [2024] SGHC 173 (“Multichain”), the Singapore High Court observed that “the assessment of the value of any cryptocurrency can never be forensically precise, as there is no inherently objective value of cryptocurrency” — different exchanges price each cryptocurrency differently, and there is no single authoritative market. The court also raised the challenge of which date to use for valuation, noting that the conventional breach-date rule may not always be appropriate given the extreme volatility of digital assets.

Further clarity on this was reached in the recent decision of Kalen, Alexandru v. World Exchange Services Pte Ltd [2026] SGHC 31 (“Kalen”), where the Singapore High Court held that the question of valuation date is closely intertwined with the doctrine of mitigation: the date of valuation should be at the time when a claimant is reasonably expected to mitigate their losses. Whether mitigation is reasonably expected depends on, inter alia, when the claimant has knowledge of the breach and whether it is possible and reasonable for the claimant to take steps to mitigate. In Kalen, the claimants’ digital tokens on the WEX platform became inaccessible on 12 July 2018, but the court found it was not reasonable to require the claimants to take mitigating steps on that date itself, as they might reasonably have thought the disruption was temporary. Instead, the court held that the appropriate valuation date was a reasonable time after the breach (i.e. around October or November 2018) by which point the claimants had heard rumours of the platform’s closure and could reasonably have been expected to take steps such as formally demanding the return of their assets, commencing legal proceedings, or purchasing equivalent tokens on other exchanges.

Notably, Kalen also rejected the “New York rule” which measures damages by the highest intermediate value reached within a reasonable time after the breach. The court found that this rule gives the claimant the benefit of perfect hindsight and risks unfairly conferring a windfall — instead preferring a formulation that directly ties the valuation date to the possibility and reasonableness of the claimant’s mitigation.

The interplay between the Multichain and Kalen decisions demonstrates that the valuation of digital assets in tracing claims is far from straightforward. Various strategies can be adopted, and various date permutations may arise depending on the circumstances of each case. Practitioners advising on asset tracing claims must therefore consider not only whether assets can be traced, but how to frame the claim in a manner that addresses the inherent valuation uncertainty, whether by seeking proprietary relief (which avoids the valuation question by claiming the asset itself) or by carefully selecting the appropriate valuation methodology and date at an early stage (which may involve consideration of whether and how a claimant should mitigate its losses upon breach).

The scope of Bankers Trust orders: the proprietary claim requirement

A critical prerequisite for obtaining Bankers Trust orders, which compel third parties such as exchanges to disclose information about assets passing through their hands, is that the applicant must assert a proprietary claim to the assets in question; mere personal claims that sound in damages are insufficient (Alliance Divine Impex Pte Ltd v. Arulappan Tony (DBS Bank Ltd, non-party) [2025] 3 SLR 68).

This underscores the significance of the finding in Re Taylor that customers retain legal title over digital assets held by exchanges. Absent a proprietary claim, a defrauded customer would be left with only personal remedies against the fraudster (who may be judgment-proof or unidentifiable) and no mechanism to compel disclosure from the exchange through which the assets passed.

Against this backdrop, the case of Re Gatecoin further demonstrates that the drafting of exchange terms and conditions has become a matter of considerable importance not only for regulatory compliance, but also for preserving the customer’s ability to pursue proprietary remedies and ancillary disclosure in the event of fraud.

Practical considerations for digital asset tracing within the Singapore landscape

In Singapore, where crypto scams have contributed to losses amounting to approximately USD 182.2 million, the decision in Re Taylor has significant implications for the digital asset tracing landscape. As a matter of practice, exchanges/platforms invariably include terms and conditions disclaiming obligations and liabilities associated with those that arise from the imposition of a trust. Further, enhanced regulations have seen more and more regulators require licensed exchanges/platforms to segregate customers’ digital assets. This means that, absent express terms permitting the exchange/platform to deal with its customers’ digital assets in its own discretion (which is unlikely given the greater regulatory scrutiny over such businesses), an outcome similar to that in Re Taylor would be likely in many cases.

First, Re Taylor bolsters the ability to seek Bankers Trust orders against exchanges/platforms that have similar custodial terms and conditions. Second, the existence of such custodial terms and conditions may also enhance the ability to obtain an interim injunction against assets held by an exchange/platform (which the proceeds of fraud can be traced into). Third, the finding in Re Taylor that the fiat currency converted from customer assets (even if not on the customers’ instructions) still belonged to the customers also has significant implications for onward tracing. It must be noted that it was not the case that the fiat currency could be traced to the digital assets of specific customers — but rather that the entirety of the fiat currency could be traced to customer assets generally, such that each customer likely holds a proportionate interest in the fiat currency.

In the FTX case, the customer terms and conditions expressly provided that digital assets belonged to the customer, but the proprietary interest was still lost because FTX/Alameda misappropriated such assets for its own investments. However, in the light of Re Taylor, it may mean that a more extensive tracing exercise could have been adopted to preserve the customers’ proprietary claims, albeit in a manner proportionate to their interest in the overall pool of customer assets.

Overall, the decision in Re Taylor provides a stronger basis for injured parties to seek proprietary reliefs/remedies if their assets are dissipated or funnelled through crypto exchanges/platforms. By establishing that customers retain legal title where custodial terms and conditions are present, Re Taylor simultaneously addresses the proprietary claim requirement for Bankers Trust orders and opens the door to more extensive tracing exercises — including into fiat currency and commingled pools.

At the same time, as the Multichain and Kalen decisions remind us, successful tracing is only half the battle. Practitioners must also grapple with valuation challenges that are unique to digital assets. In an asset class defined by volatility and the absence of a single authoritative market price, these are questions that will continue to shape the development of digital asset tracing jurisprudence in Singapore and beyond.