Legal status of crypto assets
Can an injunction be granted in relation to cryptocurrency?
It was held in the case of CLM v CLN that cryptocurrency could be protected via proprietary injunctions.
"The plaintiff in CLM v CLN [2022] SGHC 46 commenced an action to trace and recover 109.83 Bitcoin and 1497.54 Ethereum that were allegedly misappropriated from him by unidentified persons, a portion of which had been traced to digital wallets that were controlled by cryptocurrency exchanges with operations in Singapore."
"The General Division of the High Court (“Court“) ultimately held that cryptocurrency could be classified as property that could be protected via proprietary injunctions. In addition, the Court granted the first reported freezing injunction against persons unknown in Singapore for SGD 9.6 million worth of cryptocurrency assets stolen from the plaintiff."
The High Courts decision
"Having considered the case law and the above analysis in Ruscoe, the Court found that cryptocurrencies satisfied the definition of a property right in Ainsworth, a development from the position of the Court of Appeal in Quoine. The plaintiff was thus able to prove a serious arguable case that the stolen cryptocurrency assets were capable of giving rise to property rights which could be protected via a proprietary injunction, satisfying the first limb of the test."
"On the second limb of the test, the Court held that the balance clearly lay in favour of granting the injunction as there was a real risk of dissipation of the stolen cryptocurrency. If the injunction was not granted, there would be a real risk that the first defendants would dissipate the stolen cryptocurrency assets, which would prevent the plaintiff from recovering those assets even if he successfully obtained a judgement in his favour. The Court also considered that even if the plaintiff’s case were later refuted, the first defendants would only suffer losses arising from their inability to deal with the stolen cryptocurrency assets, which could be compensated by way of damages."
"As the requisite elements for the grant of a proprietary injunction were satisfied, the Court granted the proprietary injunction."