Nature of Cryptocurrencies
What is the legal nature of cryptocurrency in Singapore? Is it property?
The Singapore High Court judgment of CLM v CLN and Singapore International Commercial Court judgment of B2C2 ltd v Quoine Ltd affirms that cryptocurrency can be regarded as property and an "identifiable thing of value".
According to the recent High Court judgment of CLM v CLN [2022] SGHC 46, cryptocurrency can be regarded as property. A person may be prevented by the court from using specified cryptocurrency they hold if there is a risk that they might use that cryptocurrency while its ownership is disputed in legal proceedings (ie protected by a proprietary injunction):
"The Singapore High Court case in CLM v CLN and others [2022] SGHC 46 is the first reported Singapore decision on the grant of an injunction against persons unknown to freeze cryptocurrency."
"The court agreed that cryptocurrency can give rise to proprietary rights which could be protected via a proprietary injunction."
Source: LexBlog, last revised on 5 March 2022
The Singapore International Commercial Court in B2C2 Ltd v Quoine Pte Ltd [2019] 4 SLR 17 was of the view that cryptocurrencies have the fundamental characteristic of intangible property as being an identifiable thing of value. When the case went on appeal, the Singapore Court of Appeal in Quoine Pte Ltd v B2C2 Ltd [2020] 2 SLR 20 did not come to a final position on the question on whether cryptocurrency constituted a species of property capable of being held on trust.
As it is now, Singapore laws are not settled as to the precise nature of the property right of a cryptocurrency. So, for example, it is still uncertain whether a person may use cryptocurrency as a security to a loan. Please click here to read Rajah & Tann Singapore LLP update on "Singapore Court of Appeal Delivers Landmark Judgment on Doctrine of Mistake in Cryptocurrency-Related Contract Claim" which provides a summary of the Singapore Court of Appeal's judgment in Quoine Pte Ltd v B2C2 Ltd [2020] 2 SLR 20.