Bybit sues payroll officer for abuse of power in secretly transferring USDT, Singapore court elaborates on cryptocurrency property attributes
TechFlow Selected TechFlow Selected
Bybit sues payroll officer for abuse of power in secretly transferring USDT, Singapore court elaborates on cryptocurrency property attributes
Can USDT be held in trust as property?
Navigating Web3 tides with focused insightsCompiled | Wu Shuo Blockchain
Cryptocurrency exchange Bybit has sued Ms. Ho, who was responsible for payroll within the company, alleging abuse of power by transferring large amounts of USDT to addresses secretly owned and controlled by her. On July 25, the General Division of the Singapore High Court upheld its ruling, recognizing that cryptocurrencies are generally acknowledged as property and that holders of crypto assets possess intangible proprietary rights recognized under common law, which can be enforced in court as subject matter of litigation. The court ordered Ms. Ho to immediately repay all transferred funds plus interest to Bybit.
Below is the full translated text of the judgment, original link:
https://www.elitigation.sg/gd/s/2023_SGHC_199
Introduction
1. This case involves a type of crypto asset known as Tether, an example of what is called a stablecoin. This means its issuer claims each stablecoin issued is backed by fiat currency or other reserves of equivalent value. Issuers typically provide terms of service under which verified holders of the stablecoin have the right to redeem fiat currency from the issuer. This link to fiat (in this case, the U.S. dollar) is reflected in Tether’s commonly used name, USDT, representing "U.S. Dollar Tether." In this judgment, I will use this abbreviation.
2. In this application, ByBit Fintech Limited (“ByBit”) seeks judgment against the first defendant, Ms. Ho Kai Xin (“Ms. Ho”). She is alleged to have breached her employment contract and abused her position by transferring certain USDT to “addresses” secretly owned and controlled by her, and some fiat money to her personal bank account. The primary relief sought is a declaration that Ms. Ho holds the USDT and fiat currency on trust for ByBit. Consequently, ByBit requests either restitution of the same or traceable proceeds, or payment of an equivalent amount.
3. Courts in Singapore and elsewhere have already recognized, when granting interim injunctions, that at least there exists a serious issue to be tried, or a good arguable case, that crypto assets may constitute property capable of being held on trust. In doing so, it has not been necessary to determine whether such crypto assets are choses in action or a new form of intangible property. To grant judgment and ultimately declare a trust, this court must go further and decide whether the crypto assets in question—namely USDT—are indeed property capable of being held on trust, and if so, what kind of property they are.
4. In this case, I find that USDT, even without assistance from any legal system, can be transferred from one holder to another via cryptography, yet remains a chose in action. In this judgment, I mostly use the phrase “chose in action,” which carries the same meaning as “thing in action.” Although USDT also carries the right to redeem an equivalent amount in U.S. dollars from Tether Limited, a company based in the British Virgin Islands (“BVI”), making it more akin to traditionally recognized choses in action, I do not consider this characteristic a necessary condition for classifying a crypto asset as a chose in action. Like any other chose in action, USDT can be held on trust.
5. I further hold that ByBit has demonstrated its case for judgment, and therefore I grant the declarations sought based on a constructive trust arising from wrongdoing.
6. I now explain the reasons for these conclusions.
Background
7. ByBit, a Seychelles-based company, operates a cryptocurrency exchange bearing its name. ByBit pays employee salaries in fiat currency, cryptocurrency, or a mix of both. WeChain Fintech Pte Ltd (“WeChain”), a Singapore-based company, provides payroll services for ByBit and related entities. Ms. Ho was employed by WeChain and responsible for processing salary calculations for ByBit employees.
8. As part of her duties, Ms. Ho maintained a Microsoft Excel spreadsheet recording monthly cash and cryptocurrency payments due to ByBit employees (the “fiat Excel file” and “crypto Excel file,” respectively). The crypto Excel file listed the “addresses” used by ByBit employees to receive cryptocurrency payments. An “address” can be understood as an encrypted digital “folder” capable of “receiving” and “storing” cryptocurrency. Each address is a unique alphanumeric string. A corresponding “private key” is required to access and authorize transfers between addresses. These private keys are stored in “wallets,” which serve as the interface for interacting with cryptocurrency. Wallets hosted online by service providers—typically cryptocurrency exchanges—are known as “custodial wallets.” Custodial wallets usually exist as user-facing applications. Offline wallets are known as “self-custody wallets,” which could be as simple as a piece of paper with the private key written on it, or complex encrypted software limiting access to the private key. In short, accessing a wallet means obtaining the stored private key, thereby gaining control over the address and the cryptocurrency stored within. ByBit employees could and did frequently change their designated addresses by informing Ms. Ho, who would then update the crypto Excel file. Only Ms. Ho had authority to update the crypto Excel file, and only she had access to it, except when she submitted it monthly to her direct supervisor, Casandra Teo, for approval.
9. On September 7, 2022, ByBit discovered eight unusual cryptocurrency transactions (“anomalous transactions”) between May 31 and August 31, 2022, involving large transfers of USDT to four addresses (which I refer to simply as Address 1, 2, 3, and 4). A total of 4,209,720 USDT (“crypto assets”) were transferred. USDT derives its name from being pegged in value to the U.S. dollar; each USDT grants its holder—the issuer Tether Limited’s “verified customer”—a contractual right to redeem their USDT for U.S. dollars. The anomalous transactions were compiled into an Excel spreadsheet (“reconciliation Excel file”), and Ms. Ho was tasked with explaining the discrepancies. Initially, Ms. Ho attributed the anomalous transactions to unintentional errors or technical glitches and proposed calculating amounts to be recovered from ByBit employees.
10. From September 9 to 22, 2022, Ms. Ho still failed to provide any explanation for the anomalous transactions. When questioned why payments to different employees were sent to the same address—Address 1—Ms. Ho suggested she might have accidentally made a mistake. She continued updating the reconciliation Excel file, describing the anomalous transactions as “overpayments” to ByBit employees.
11. On September 27, 2022, ByBit contacted one of the supposed recipients of the anomalous transactions. One million three hundred thousand USDT had been paid to Address 1 under his name. However, according to ByBit, the employee denied ever specifying an address, as he had only received fiat compensation and did not know who owned Address 1. ByBit’s internal investigation revealed that Ms. Ho’s work email sent an email containing Address 1 to herself on May 19, 2022. Her work email also received an email containing all four addresses on August 29, 2022, this time from Ms. Ho’s personal email. These emails were recovered by ByBit after having been deleted.
12. ByBit also discovered that Ms. Ho caused $117,238.46 USD (“fiat assets”) to be paid into her personal bank account in May 2022. It is undisputed that Ms. Ho had no entitlement to the fiat assets, and she explicitly accepted that she held the fiat assets on trust for ByBit. However, to date, Ms. Ho has taken no steps to return the fiat assets.
13. On September 29 and October 4, 2022, ByBit conducted interview sessions with Ms. Ho. In the first session, Ms. Ho claimed she could not recall details about the anomalous transactions. In the second session, confronted with ByBit’s findings, Ms. Ho told ByBit that she did not own the wallets linked to the four addresses—claiming they belonged to her cousin, whom she said she could not access. Ms. Ho stated that her cousin had proposed helping him transfer cryptocurrency, and that she had CCTV footage showing him conducting the anomalous transactions at her home. Ms. Ho admitted she had been involved in the scheme since three months prior to the interviews and told ByBit she hoped to report the matter to the police because she did not own the crypto assets. After the meetings, Ms. Ho refused to sign a one-page statement recording what had occurred. Nevertheless, it is undisputed that Ms. Ho made these statements to ByBit. Thereafter, Ms. Ho ceased contact with ByBit and WeChain and did not attend subsequent meetings.
14. ByBit commenced this proceeding on October 12, 2022. ByBit successfully obtained several interim reliefs, including a worldwide freezing order against Ms. Ho, and proprietary injunctions over the cryptocurrency in the four addresses (i.e., the crypto assets) and the fiat assets in Ms. Ho’s bank account. Ms. Ho personally accepted service of the writ and orders on October 18, 2022. On October 31, 2022, Ms. Ho disclosed in an affidavit that the wallets associated with the four addresses were owned by her cousin Jason Teo (“Jason”). Ms. Ho claimed she could not access any of the wallets, had deleted text message records with Jason before being served, and did not have CCTV recordings because footage older than seven days automatically gets overwritten. Ms. Ho filed her defense on November 11, 2022, and issued a third-party notice against Jason.
15. Ms. Ho fully accepts that the crypto assets belong to ByBit and that she has no right to them. Her primary defense is that Jason stole the crypto assets from ByBit without her knowledge. She claims she derived no benefit because the wallets linked to the four addresses were solely owned and controlled by Jason. According to her, starting in May 2022, she had asked Jason to assist in reviewing the crypto Excel file during “many” visits to her home. Subsequently, Jason accessed her work laptop without her knowledge or consent—an act she claims to have discovered only after reviewing home CCTV footage following ByBit’s alert about the anomalous transactions. She confronted Jason, who admitted deliberately replacing several employee-designated addresses with the four addresses. Despite repeated demands, Jason refused to return the crypto assets. Ms. Ho maintains she did not know the cause of the anomalous transactions until September 9, 2022—more than seven days after the last transaction on August 31, 2022. She does not explain how she viewed the alleged CCTV footage.
16. Dissatisfied with Ms. Ho’s disclosure, ByBit sought and obtained on December 7, 2022, an order for wider disclosure against Ms. Ho and certain third parties, including her father and husband. This followed ByBit’s discovery that Ms. Ho began making substantial purchases from July 2022, including a freehold penthouse apartment jointly purchased with her husband, a brand-new car, and several Louis Vuitton products. Notably, although initially denying ownership of any real property, Ms. Ho later explained she used profits earned from cryptocurrency trading on MetaMask and crypto.com to purchase the penthouse. This contradicts her earlier claim that her MetaMask account was entirely unused. Ms. Ho did not provide her MetaMask and crypto.com addresses or account transaction statements. According to Ms. Ho, she lost access to her crypto.com account because it was registered under her personal email, which had been disabled for unknown reasons. Similarly, she could not access her MetaMask account because she bought a new phone in October 2022 and could not retrieve necessary passwords from her previous device. I also note that contrary to the disclosure order, Ms. Ho initially failed to disclose all her assets, such as her bank accounts, requiring further inquiries by ByBit.
17. Meanwhile, Ms. Ho applied for and obtained permission to serve Jason by alternative means. Curiously, in her supporting affidavit, Ms. Ho stated that it was Jason who deleted their text message history after she informed him she had been served with the writ. Jason has not appeared in these proceedings.
18. On March 30, 2023, ByBit filed this application for summary judgment. Ms. Ho did not file any affidavit in opposition pursuant to Rule 17(3) of Order 9 of the Rules of Court 2021. On April 18, 2023, prior to the hearing, Ms. Ho took over her own defense. Ms. Ho did not attend any of my previous hearings nor submit submissions.
19. For completeness, ByBit also applied to amend their claim and submitted further submissions, which I directed to be filed by May 19, 2023. ByBit originally claimed Ms. Ho held the crypto and fiat assets on remedial constructive trust. Thus, ByBit sought amendment to include an alternative argument based on institutional constructive trust. I allowed Ms. Ho to respond to the amendment and extended her deadline to submit submissions on summary judgment to May 26, 2023. As before, Ms. Ho submitted no response and raised no objection to the amendment application.
20. ByBit submitted that the proposed amendments were merely clarificatory and introduced no new facts. The pleadings already clearly indicated that Ms. Ho wrongfully caused the anomalous transactions, and her defense would not be prejudiced by the amendment. Conversely, the amendment allows the real issues in dispute to be fully determined, and Ms. Ho would suffer no injustice that could not be compensated in costs.
21. I agree that the proposed amendments are clarificatory, adding an alternative legal conclusion—institutional constructive trust—based on already pleaded facts, enabling the true issues to be finally and completely determined. Accordingly, on June 30, 2023, I granted leave to amend, and proceeded with the summary judgment application based on ByBit’s Statement of Claim (2nd Re-amended), filed on July 5, 2023.
Parties’ Cases
Ms. Ho’s Case
22. As noted above, Ms. Ho’s primary contention is that responsibility lies entirely with Jason (see [15] above). From the affidavits, Ms. Ho appears to claim she had no way of identifying Jason or knowing his personal information or address. Additionally, Ms. Ho alleges that Jason accessed her work and personal emails, sent and then deleted the emails containing the four addresses (see [11] above). She claims Jason did so without authorization, and denies deleting those emails herself. Moreover, Ms. Ho claims she impliedly lied to ByBit during the interview on October 4, 2022 (see [13] above). According to Ms. Ho, ByBit sternly warned her that her conduct was criminal and insisted she take responsibility for the anomalous transactions. She responded this way because she wanted to protect Jason, with whom she is close, and because she needed to rush off to care for her two-year-old son who was ill. Due to her son’s illness, she declined to sign the one-page confirmation statement after the interview, as she had no time to review its contents, and refused to attend follow-up interviews.
23. Regarding the fiat assets, Ms. Ho states that while preparing the fiat Excel file, she mistakenly entered her own data into another employee’s record, causing the erroneous payment.
ByBit’s Case
24. ByBit submits that under O 9 r 17(1)(a) of the Rules of Court 2021, it is entitled to summary judgment because it has established a prima facie case and Ms. Ho has no real prospect of defending the claim. ByBit’s submissions focus on the crypto assets, as Ms. Ho concedes holding the fiat assets on trust for ByBit.
25. First, ByBit argues that “Jason” is entirely fictitious. Ms. Ho offers no evidence supporting Jason’s existence, and her account of events is inherently incredible. Concurrent with the anomalous transactions, Ms. Ho engaged in a suspicious spending spree: approximately $362,000 USD on a new car, $30,000 USD on Louis Vuitton products, and abruptly cancelled her existing HDB pre-sale flat to purchase a freehold penthouse worth about $3.7 million USD. Furthermore, ByBit obtained identification data from the service provider of the wallet linked to Address 1. This confirms Ms. Ho owns the wallet and includes her ID and selfie, provided during account registration. Public transaction records also match the inflow of anomalous transactions to Address 1, with certain transfer amounts suggesting USDT sent to Addresses 2 and 3 were quickly moved to Address 1. This proves Ms. Ho owns and controls the wallet linked to Address 1, and likely owns and controls wallets linked to the other addresses.
26. Second, ByBit argues that crypto assets are choses in action and thus property capable of being held on trust. This is because USDT confers upon Tether Limited’s verified customers the right to redeem USDT for an equivalent amount of fiat currency. ByBit argues that Address 3 is linked to a self-custody wallet, meaning Ms. Ho had direct access to the relevant private keys and thus direct control over Address 3 and the USDT within it, which can be held on trust as a chose in action. For Addresses 1, 2, and 4, they are linked to custodial wallets. With custodial wallets, access to private keys is held by the service provider, not the user. Instead, users of custodial wallets have contractual rights to instruct the provider to transfer cryptocurrency between addresses. ByBit analogizes this to bank accounts, where the cryptocurrency balance stated in the custodial wallet (akin to an account balance) represents a chose in action against the service provider (akin to a bank). Hence, the relevant property is also a chose in action—the right to instruct the service provider regarding the USDT credit balance.
27. Third, ByBit argues that Ms. Ho holds the crypto and fiat assets on constructive trust, or alternatively, has been unjustly enriched. ByBit contends Ms. Ho obtained the crypto assets through fraud by manipulating the crypto Excel file, thereby causing ByBit to wrongly pay the crypto assets to four addresses under Ms. Ho’s control, giving rise to an institutional constructive trust. Alternatively, ByBit argues a remedial constructive trust should be recognized here given the presence of fraud or wrongdoing, tainting Ms. Ho’s conscience. Therefore, ByBit submits I should grant a tracing order, as Ms. Ho dealt with the crypto and fiat assets in breach of the freezing order. For the fallback claim of unjust enrichment, ByBit relies on the factor of mistake of fact—that ByBit was misled into believing cryptocurrency payments were due to employees at the four addresses. Hence, ByBit submits it is entitled to compensation for the value of the crypto assets.
Issues to be Determined
28. Two issues arise for determination in this case:
(a) Whether USDT can be property capable of being held on trust;
(b) Whether ByBit is entitled to summary judgment.
Issue 1: USDT is Property Capable of Being Held on Trust
29. Despite the novelty of crypto assets, they are not only being transferred in value but also appearing on corporate balance sheets when companies hold them, as the accounting profession develops standards for valuing and reporting such assets. The Monetary Authority of Singapore (“MAS”) recently published a consultation paper proposing amendments to the Payment Services Regulations, which will implement segregation and custody requirements for digital payment tokens: MAS, “Public Consultation Response on Proposed Regulatory Measures for Digital Payment Token Services,” released July 3, 2023. These proposed amendments reflect the practical reality that such digital assets can be identified and segregated, supporting the view that they should be legally capable of being held on trust.
30. Moreover, court rules give general recognition to cryptocurrency as property. Under Order 22 of the Rules of Court 2021, relating to enforcement of judgments and orders, O 22 r 1(1) defines “chattels” to include “cash, debts, deposits, bonds, shares or other securities, membership of clubs or societies, and cryptocurrency or other digital currencies” [emphasis added]. Thus, cryptocurrency is explicitly recognized as a form of property subject to enforcement orders. Although the drafters of the Rules of Court 2021 did not specify exact methods for enforcing such orders (see Civil Justice Commission Report (Dec 29, 2017) (Chairman: Judge Andrew Phang)), it logically follows that procedures such as serving a garnishee notice on individuals or entities possessing or controlling chattels (O 22 r 6(4)(b)) or registering ownership of intangible chattels (O 22 r 6(4)(g)) can extend to cryptocurrency or other digital currencies.
31. Crypto assets are not classified as tangible property because we cannot physically hold them like cars or jewelry. They lack fixed physical identity. Yet crypto assets do manifest in the physical world, albeit imperceptible to humans. The combination of private and public keys unlocks a prior cryptographic lock and locks the unspent transaction output (UTXO) of the crypto asset onto the blockchain at the holder’s public address. Professor Kelvin Low suggests the rights held by a private key owner are “properly conceptualised as narrow rights over the locking of the crypto asset’s unspent transaction outputs (UTXOs) on the blockchain to the holder’s public address”: see Kelvin FK Low, “Trusts of Cryptoassets” (2021) 34(4) Trust Law International 191. This manifestation at the level of digital bits and bytes is not permanent—each transaction changes it. Nonetheless, we identify what is occurring as specific digital tokens, much like naming a river despite constantly changing water in its bed.
32. While some may doubt the value of crypto assets, it bears remembering that value is not inherent in objects. Though we say certain materials are expensive—gold more valuable than wood—this is a judgment made collectively by humans. It is also a judgment that changes with context. On a sinking ship, a floating wooden chair is more valuable than a golden throne.
33. This description of crypto assets shows modern humans can define and identify them, allowing them to be traded and valued as holdings. They undoubtedly meet Lord Wilberforce’s oft-cited dictum in National Provincial Bank v Ainsworth ([1965] 1 AC 1175, 1248):
Before rights or interests can be categorized as property, or as rights affecting property, they must be definable, identifiable by third parties, capable in their nature of assumption by third parties, and have some degree of permanence or stability.
34. The next question is whether USDT falls within the category of choses in action. Arguments that crypto assets should not be classified as choses in action rely on the origin of the category as rights enforceable against persons through litigation (in court), such as rights to monetary payment or debt, or contractual rights. There is no separate counterparty to the rights of a crypto holder. But over time, the category of choses in action has expanded to include documents of title to intangible property, and ultimately intangible rights such as copyright: see W.S. Holdsworth, “The Historical Treatment of ‘Choses’ at Common Law” (1920) 33(8) Harvard Law Review 997. As Holdsworth notes in the introduction to his authoritative article at 998:
Clearly, the variety of things included under the term “choses in action” necessarily leads to a variety of legal incidents attaching to the different classes of choses. Indeed, their legal incidents differ greatly; because they are themselves different, they must necessarily be treated differently by courts and legislatures. It is impossible to deal comprehensively with the law of choses in action; the various classes of choses are not usually dealt with under this single comprehensive head, but under their more appropriate branches of law. For instance, if we wish to understand the law relating to bills and notes, shares, copyrights, or patents, we do not look for it in treatises on choses in action, but in books on commercial law, company law, or special monographs dealing with these particular subjects.
35. Holdsworth’s historical survey reveals the diversity of intangible property classified as choses in action. This diversity shows the category is broad, flexible, and not closed. These characteristics explain and justify the oft-quoted maxim by Fry J in Colonial Bank v Whinney ([1885] 30 Ch D 261, 285): “All personal property is either in possession or in action. The law knows no third category between the two.”
36. Therefore, I conclude that, in principle, holders of crypto assets possess an intangible proprietary right recognizable under common law as a chose in action, and thus enforceable in court. While one might argue this reasoning contains circularity—since one could also say the right to enforcement in court is what makes it a chose in action—this mode of reasoning is not significantly different from how law treats other social constructs, such as money. Only because people universally accept the exchange value of shells, beads, or differently printed paper notes do they become money. Acceptance of money arises from collective mutual trust. This is reflected in Lord Mansfield’s famous observation in Miller v Race ([1758] 1 Burr 452, 457), noting that anything “universally accepted among mankind” as money acquires “the credit and currency of money” for all intents and purposes.
37. ByBit also relies on Tether’s current Terms of Service, which stipulate contractual redemption rights. Clause 3 includes the following provisions on redemption rights:
Tether issues and redeems Tether tokens. Tether tokens can be used, held, or exchanged online wherever someone is willing to accept Tether tokens. Tether tokens are 100% backed by Tether’s reserves. Tether tokens are denominated in a range of fiat currencies. For example, if you purchase EURT, your Tether token will be pegged 1:1 to the euro. If you issue EURT worth 100.00 euros, Tether will hold reserves worth 100.00 euros to back these Tether tokens. The composition of the reserves backing Tether tokens is entirely controlled by Tether and at Tether’s sole discretion. Tether tokens are backed by Tether’s reserves (including fiat currency), but Tether tokens themselves are not legal tender. Tether will not issue Tether tokens against consideration consisting of digital tokens (e.g., Bitcoin); only currency will be accepted at issuance. To have Tether directly issue or redeem Tether tokens, you must be a verified customer of Tether. No exceptions will be made to this requirement. The right to redeem or issue Tether tokens is your personal contractual right. If delays in redemption or withdrawal of Tether tokens become necessary due to insufficient liquidity, unavailability, or loss of any reserves held by Tether supporting the Tether tokens, Tether reserves the right to delay such redemption or withdrawal, and Tether reserves the right to redeem Tether tokens through in-kind redemption of securities and other assets held in the reserves. Tether makes no representation or warranty as to whether Tether tokens will be tradable on its website at any future time, or even whether they will be tradable on its website at all.
38. The Terms of Service are governed by BVI law. ByBit submitted a legal opinion from Sam Goodman, a qualified BVI lawyer, stating that under BVI law, the contractual right of a “verified customer” of Tether Limited to redeem USDT can be enforced by bringing proceedings against Tether Limited. ByBit relies on this to support its argument that USDT constitutes a chose in action.
39. In my analysis, this feature of USDT may constitute another chose in action potentially held by USDT holders, but its existence is not necessary for me to conclude that the rights represented by USDT are themselves choses in action.
Issue 2: ByBit Is Entitled to Judgment
40. ByBit submits it has established a prima facie case, surpassing the threshold required to obtain a worldwide freezing order—namely, showing a good arguable case. Conversely, Ms. Ho cannot show a fair or reasonable probability of a genuine or bona fide defense.
Jason Does Not Exist
41. I find more probable the inference ByBit draws from all the evidence—that Jason does not exist (or at least did not play the role attributed to him by Ms. Ho). There is compelling evidence that Ms. Ho fraudulently transferred both crypto and fiat assets to herself. As set out in [25], there is direct evidence that Ms. Ho owns the wallet linked to Address 1, and circumstantial evidence of her unexplained lavish spending. Leveraging her employment with WeChain—a firm hired to manage ByBit’s payroll—and abusing the trust placed in her, Ms. Ho manipulated the crypto Excel file to steal both crypto and fiat assets.
Constructive Trust
42. An institutional constructive trust arises upon theft of assets, and equitable tracing remedies are available for stolen assets. As Lord Browne-Wilkinson stated in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 1 AC 669 at 716:
I agree that misappropriated funds may be traced in equity. But in such cases the proprietary interest which equity enforces arises under a resulting trust rather than a constructive trust. Although it is difficult to find clear authority for the proposition, when property is obtained by fraud equity imposes a constructive trust on the fraudulent recipient: the property is recoverable and may be traced in equity. Thus, an infant who obtains property by fraud is under an obligation to restore it: Stocks v Wilson [1913] 2 KB 235, 244; R Leslie Ltd v Sheill [1914] 3 KB 607. Money stolen from a bank account may be traced in equity: Bankers Trust Co v Shapira [1980] 1 WLR 1274, 1282C-E. See also McCormick v Grogan (1869) LR 4 HL 82, 97.
43. I should also add that even if Ms. Ho mixed the USDT with USDT in other online custodial wallet balances, or mixed the fiat assets with other money in her bank account, the constructive trust may still operate: Foskett v McKeown [2001] 1 AC 102.
44. Given my findings of fact, I declare a constructive trust over the crypto and fiat assets. ByBit is the legal and beneficial owner of the crypto assets. Given my grant of relief based on institutional constructive trust, I need not address the alternative bases of remedial constructive trust and unjust enrichment.
45. ByBit seeks a range of proprietary and personal orders based on its investigation, which I now grant as follows:
(a) Declaration of a constructive trust over the crypto assets and fiat assets;
(b) Order Ms. Ho to immediately pay US$647,880 to ByBit (being the value of crypto assets in Wallets 3 and 4);
(c) Order Ms. Ho to immediately pay SGD$117,238.46 to ByBit (being the fiat assets);
(d) Order Ms. Ho to immediately transfer all remaining funds in Wallet 1 to ByBit up to a total of US$3,561,840 (being the value of crypto assets transferred to Wallets 1 and 2);
(e) Regarding the residual crypto assets transferred to Wallets 1 and 2 after deduction of amounts transferred under (d) above (i.e., USDT worth US$3,561,840) (“Residual Amount”):
(i) Order Ms. Ho to hold the Residual Amount, or any money or funds representing its value that she currently owns or receives, or that are received into accounts of any person acting for her or at her direction;
(ii) Grant a tracing order over the Residual Amount or any part thereof, enabling ByBit to trace and recover converted assets or their proceeds (if any);
(iii) Order Ms. Ho to pay to ByBit all sums found due after accounting.
46. I will also award interest at the standard annual rate of 5.33% from the dates Ms. Ho transferred the impugned assets until judgment, applicable to the amounts payable under [45(b)] and [45(c)].
Conclusion
47. Following summary judgment against Ms. Ho, I also award ByBit costs of USD$45,000.00 (taking into account the legal novelty of the issues raised and work done in seeking interim relief, with costs included therein) and disbursements of USD$11,500.00.
Philip Jeyaretnam
Judge of the High Court
Quek Wen Jiang Gerard, Kyle Gabriel Peters, Ling Ying Ming Daniel, Mato Kotwani and Chua Ze Xuan (PDLegal LLC) for the plaintiff;
First to Sixth Defendants absent and unrepresented.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
吴说区块链
