Full text of the judgment Bybit payroll officer embezzles public funds, Singapore court determines the property nature of cryptocurrencies

Bybit payroll officer embezzles public funds, Singapore court determines cryptocurrencies as property

Compilation | Wu Shuo Blockchain

Bybit, the cryptocurrency exchange, has filed a lawsuit against Ms. Ho, who is responsible for paying salaries within the company, for abusing her authority and transferring a large amount of USDT to an address secretly owned and controlled by her. The Singapore High Court upheld the ruling on July 25th, stating that cryptocurrency is widely recognized as property and that the holder of cryptocurrency generally has the intangible property rights recognized by common law. Therefore, it can be enforced in court as an item in litigation. The court ruled that Ms. Ho must immediately repay Bybit all transferred funds with interest.

Here is the full translation of the judgment, original link:



1. This case involves a type of cryptocurrency called Tether, which is an example of a stablecoin. This means that the issuer claims to support each issued stablecoin with an equivalent value of fiat currency or other reserves. Issuers typically provide terms of service, under which verified holders of stablecoins have the right to redeem fiat currency from the issuer. This link to fiat currency (in this case, the US dollar) is reflected in the common name for Tether, namely USDT, which stands for US dollar Tether. In this judgment, I will use this abbreviation.

2. In this application, ByBit Fintech Limited (“ByBit”) seeks judgment against the first defendant, a woman named Ho Kai Xin (“Ms. Ho”). The allegations against her are that she violated her employment contract, abused her position, and transferred some USDT to an “address” secretly owned and controlled by her, as well as some fiat currency to her own bank account. The primary relief sought is a declaration that Ms. Ho holds the USDT and fiat currency on behalf of ByBit. As a result, ByBit requests the return of the same or traceable proceeds or the payment of an equivalent amount.

3. Courts in Singapore and elsewhere have already recognized, in granting interim injunctions, that there is at least a serious issue to be tried, or a good arguable case, that cryptocurrency can be held as property in trust. In doing so, it is not yet necessary to determine whether these cryptocurrencies are things in action or a new form of intangible property. In order to grant the judgment and ultimately declare a trust, this court must further decide whether the cryptocurrency in question in this case, namely USDT, is indeed property that can be held in trust and, if so, what type of property it is.

4. In this case, I find that USDT, even without the assistance of the legal system, can be transferred from one holder to another through cryptography, but it is still a thing in action. In this judgment, I mostly use the phrase “thing in action,” which has the same meaning as a chose in action. Although USDT also carries the right to redeem for equivalent US dollars from Tether Limited, a company in the British Virgin Islands (BVI), which makes it more akin to a traditionally recognized chose in action, I do not consider this characteristic to be a necessary condition for classifying a cryptocurrency as a chose in action. Like any other chose in action, USDT can be held in trust.

5. I further believe that ByBi has proven its case for the sought-after judgment, and therefore I grant the requested declaration on the basis of the constructive trust doctrine.

6. I will now explain the reasons for my conclusions.


7. Seychelles company ByBit owns a cryptocurrency exchange named after itself. ByBit pays its employees’ salaries in traditional currency, cryptocurrency, or a combination of both. Singapore company WeChain Fintech Pte Ltd (“WeChain”) provides payroll services to ByBit and its related entities. Ms. Ho is an employee of WeChain and is responsible for handling the salary calculations for ByBit employees.

8. As part of her duties, Ms. Ho maintains a Microsoft Excel spreadsheet that records the cash and cryptocurrency payments (referred to as “fiat Excel file” and “cryptocurrency Excel file,” respectively) to be made to ByBit employees each month. The cryptocurrency Excel file lists the “addresses” used by ByBit employees to receive cryptocurrency payments. An “address” can be understood as an encrypted digital “folder” that can “receive” and “store” cryptocurrency. Each address is a unique alphanumeric string. The corresponding “private key” is required to access and authorize transfers between addresses. These private keys are stored in a “wallet,” which can be understood as the means of interacting with cryptocurrencies. Wallets hosted online by service providers (typically cryptocurrency exchanges) are referred to as “hosted wallets.” Hosted wallets usually exist in the form of user-interface applications. Offline wallets are referred to as “self-hosted wallets” and can be as simple as a piece of paper with the private key written on it or a complex encryption software that restricts access to the private key. In short, accessing a wallet means obtaining the stored private key, thereby controlling the addresses and the cryptocurrency stored within them. ByBit employees can and do frequently change their designated addresses by communicating new addresses to Ms. Ho, who then updates the cryptocurrency Excel file. Only Ms. Ho is able to update the cryptocurrency Excel file, and she is the only one who can access these files, except for the requirement to submit the cryptocurrency Excel file to her immediate superior, Casandra Teo, for approval every month.

9. On September 7, 2022, ByBit discovered eight unusual cryptocurrency payments (“anomalous transactions”) that occurred between May 31, 2022, and August 31, 2022, involving the transfer of a large amount of USDT to four addresses (referred to simply as Address 1, 2, 3, and 4). A total of 4,209,720 USDT (“cryptocurrency assets”) was transferred. USDT is named as such because its value is pegged to the US dollar, and each USDT grants its holder (i.e., the “verified customer” of issuer Tether Limited) contractual rights to exchange their USDT for US dollars. These anomalous transactions were compiled into a spreadsheet (“reconciliation Excel file”), and Ms. Ho was tasked with explaining these discrepancies. Initially, Ms. Ho attributed the anomalous transactions to inadvertent errors or technical glitches and proposed calculations for the amount to be recovered from ByBit employees.

10. From September 9th to 22nd, 2022, Ms. Ho still failed to provide any explanation for the abnormal transactions. When asked why different amounts paid to different employees were sent to the same address, address 1, Ms. Ho suggested that it might have been a mistake on her part. Ms. Ho continued to provide status updates in the reconciliation Excel file, describing the abnormal transactions as “overpayment” to ByBit employees.

11. On September 27th, 2022, ByBit contacted a presumed recipient of the abnormal transactions. 1.3 million USDT had been paid to an address under his name, address 1. However, according to ByBit, the employee denied ever specifying an address as he had only been paid in traditional currency and did not know who owned address 1. ByBit’s internal investigation found that Ms. Ho had sent herself an email on May 19th, 2022, containing address 1. Ms. Ho’s work email also received an email on August 29th, 2022, containing all four addresses, this time from her personal email. These emails were recovered by ByBit as they had been deleted.

12. ByBit also discovered that in May 2022, Ms. Ho caused $117,238.46 (“fiat assets”) to be paid into her personal bank account. It is undisputed that Ms. Ho had no right to the fiat assets and she explicitly acknowledged holding the fiat assets in trust for ByBit. However, to date, Ms. Ho has taken no steps to return the fiat assets.

13. On September 29th and October 4th, 2022, ByBit conducted meetings with Ms. Ho. In the first meeting, Ms. Ho claimed she could not remember the details of the abnormal transactions. In the second meeting, Ms. Ho was confronted with the findings of ByBit’s investigation. Ms. Ho told ByBit that she did not own the wallets associated with the four addresses, which belonged to her cousin. She claimed she had no access to them. Ms. Ho said it was her cousin who proposed that she help him transfer the cryptocurrencies and she had CCTV footage of him conducting the abnormal transactions at her home. Ms. Ho admitted that she had been involved in this plan three months before the meetings and told ByBit that she wanted to report it to the police as she did not own any cryptocurrencies. After the meetings, Ms. Ho refused to sign a single-page statement that recorded what had transpired. However, it is undisputed that Ms. Ho made these statements to ByBit. Subsequently, Ms. Ho lost contact with ByBit and WeChain and did not attend further meetings.

14. ByBit commenced this lawsuit on October 12th, 2022. ByBit successfully obtained several interim remedies, including a worldwide freezing order against Ms. Ho and ownership injunctions over the cryptocurrencies (i.e., crypto assets) in the four addresses and the fiat assets in Ms. Ho’s bank account. On October 18th, 2022, Ms. Ho personally accepted the originating process and orders. On October 31st, 2022, Ms. Ho disclosed in an affidavit that the wallets associated with the four addresses belonged to her cousin, Jason Teo (“Jason”). Ms. Ho claimed she had no access to any of the wallets and had deleted text message exchanges with Jason before accepting service of the orders. She also did not turn off the CCTV footage as recordings over seven days would be automatically deleted. Ms. Ho submitted her defense on November 11th, 2022, and served third-party notice on Jason.

15. Ms. Ho fully acknowledges that the encrypted assets belong to ByBit and she has no right to own them. Ms. Ho’s main defense is that Jason stole ByBit’s encrypted assets without her knowledge. She did not benefit from it as the wallet associated with the four addresses is solely owned and controlled by Jason. Her case is that starting from May 2022, she had requested Jason’s assistance in checking the cryptocurrency Excel file “many times” when he visited her home. Afterwards, Jason accessed her work laptop without her knowledge or consent, which Ms. Ho only discovered through viewing the CCTV footage at home after being alerted by ByBit of abnormal transactions. She then confronted Jason, who admitted to intentionally replacing several addresses designated by ByBit with the four addresses. Despite her repeated requests, Jason refused to return the encrypted assets. Ms. Ho’s position is that she was still unaware of the reason for the abnormal transactions on September 9, 2022, more than a week after the last abnormal transaction on August 31, 2022. She did not explain how she was able to view the alleged footage.

16. Dissatisfied with Ms. Ho’s disclosure, ByBit sought and obtained an order on December 7, 2022, for wider disclosure against Ms. Ho and some third parties, including her father and husband. This is because ByBit discovered that Ms. Ho had made some large-scale purchases starting from July 2022, including a top-floor apartment with permanent ownership purchased together with her husband, a brand-new car, and several Louis Vuitton products. It is worth noting that although she initially denied owning any real property, Ms. Ho later explained that she purchased the top-floor apartment with permanent ownership using money earned from cryptocurrency transactions on MetaMask and crypto.com. This contradicts her previous claim that her MetaMask account was completely unused. Ms. Ho did not provide her MetaMask and crypto.com addresses, nor did she provide account transaction statements. According to Ms. Ho, she lost access to her crypto.com account as it was registered to her personal email, which has been disabled for unknown reasons. Similarly, she cannot access her MetaMask account as she purchased a new phone in October 2022 and cannot retrieve the necessary password 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, which required further inquiries by ByBit.

17. At the same time, Ms. Ho applied for and obtained a license for substitute service against Jason. Strangely, in her supporting affidavit, Ms. Ho stated that Jason deleted their text message history after she informed him that she had been served with the lawsuit. Jason did not appear in this litigation.

18. On March 30, 2023, ByBit filed this application for summary judgment. Ms. Ho did not file any sworn affidavit in response to the application pursuant to Rule 17(3) of the 2021 Court Rules. 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 and did not submit a memorandum.

19. For completeness, ByBit also applied to amend their claim and submit further memoranda, which I directed to be filed by May 19, 2023. ByBit initially contended that Ms. Ho held the crypto assets and fiat assets in remedial constructive trusts. Therefore, ByBit seeks to amend to present an alternative argument based on institutional constructive trusts. I allowed Ms. Ho to provide her comments on the amendment and extended the deadline for her to submit comments on the summary judgment by May 26, 2023. As before, Ms. Ho did not submit any comments or object to the amendment.

20. ByBit submitted that the amendment is clarificatory and does not introduce any new facts. The statement of claim already clearly stated that Ms. Ho caused the abnormal trades in error, and Ms. Ho’s defense would not be affected by the amendment. On the contrary, the amendment allows for the determination of the true disputed issues, and Ms. Ho would not suffer any damage that cannot be compensated for by costs.

21. I agree that the proposed amendment is clarificatory and adds an alternative legal conclusion of institutional constructive trusts based on the facts already stated, allowing for the full and final determination of the true disputed issues. Therefore, on June 30, 2023, I allowed the amendment and commenced the application for summary judgment based on ByBit’s amended statement of claim, which was filed on July 5, 2023.

Parties’ Cases

Ms. Ho’s Case

22. As mentioned earlier, Ms. Ho’s main contention is that the responsibility should lie solely with Jason (see paragraph [15] above). From the affidavits, it appears that Ms. Ho claims she had no way of identifying Jason or knowing his personal information or address. Furthermore, Ms. Ho believes that Jason accessed her work and personal emails, sent and then deleted emails stating four addresses (see paragraph [11] above). Ms. Ho denies deleting these emails without authorization. Additionally, Ms. Ho claims that she implied in an interview on October 4, 2022, that she lied to ByBit (see above [13]). According to Ms. Ho, ByBit strongly warned her that her actions were criminal and consistently insisted that she was responsible for the abnormal trades. Ms. Ho responded in this way to protect Jason, with whom she has a close relationship, and because she needed to take care of her sick two-year-old son. Due to her son’s condition, she refused to sign a one-page confirmation sheet after the interview as she did not have time to review its contents and declined to participate in subsequent interview meetings.

23. Regarding the statutory assets, Ms. Ho stated that she accidentally input her data into another employee’s data while preparing the statutory Excel file, resulting in incorrect payment.

ByBit Case

24. ByBit argues that, under Rule 17(1)(a) of the 2021 Court Rules, it is entitled to summary judgment as it has established a prima facie case and Ms. Ho has not defended the claim. ByBit’s statement focuses on the cryptocurrency assets as Ms. Ho accepted that she holds ByBit’s statutory assets in trust.

25. First, ByBit argues that “Jason” is entirely fictional. Ms. Ho has no evidence to support the existence of Jason and her description of the events is inherently unbelievable. Alongside the suspicious transactions, Ms. Ho also engaged in a questionable spending spree. She spent approximately $362,000 on a new car, $30,000 on Louis Vuitton products, and suddenly canceled her existing pre-sale HDB apartment to purchase a top-floor apartment valued at around $3.7 million. Additionally, ByBit obtained incriminating information from the service provider of the wallet associated with Address 1. This proves that Ms. Ho owns the wallet and includes her identification card and selfies, which she provided during the account registration process. The public transaction records also match the suspicious transactions flowing into Address 1, with certain dates indicating that USDT transferred to Addresses 2 and 3 was quickly moved to Address 1. This proves that Ms. Ho owns and controls the wallet associated with Address 1 and may own and control wallets associated with other addresses.

26. Secondly, ByBit argues that cryptocurrency assets consist of options and can therefore be the subject matter of a trust. This is because USDT grants certified customers of Tether Limited the right to exchange USDT for the equivalent value in fiat currency. ByBit contends that Address 3 is associated with a self-custodial wallet, which means Ms. Ho can directly access the relevant private keys and thus have direct control over Address 3 and its USDT, which can be held as an option under trust. As for Addresses 1, 2, and 4, they are associated with custodial wallets. In the case of custodial wallets, the access to private keys is safeguarded by the service provider, not the user of the custodial wallet. Instead, users of custodial wallets have contractual rights to instruct the service provider to transfer the cryptocurrency between addresses. ByBit likens this to a bank account, where the cryptocurrency balance declared in the custodial wallet (equivalent to an account balance) is an option against the service provider (equivalent to a bank). Therefore, the relevant property is also an option, namely the right to instruct the service provider regarding the USDT credit balance.

27. Thirdly, ByBit argues that Ms. Ho holds the cryptocurrency and statutory assets in a constructive trust, or alternatively, she has been unjustly enriched in the sum of the cryptocurrency and statutory assets. ByBit contends that Ms. Ho obtained the cryptocurrency assets through fraudulent means as she manipulated the cryptocurrency Excel file, resulting in ByBit mistakenly paying the cryptocurrency assets to the four addresses controlled by Ms. Ho, thereby creating an institutional constructive trust. Alternatively, ByBit argues that a remedial constructive trust should be recognized in this case as there has been fraud or wrongdoing and Ms. Ho’s conscience has been affected. Therefore, ByBit argues that I should grant a tracing order as Ms. Ho traded the cryptocurrency and statutory assets in breach of the freezing order. For the alternative claim of unjust enrichment, ByBit relies on the factor of factual mistake and unfairness, namely that ByBit was misled to believe that the cryptocurrency payment should be made to its employee at the four addresses. Therefore, ByBit submits that it is entitled to compensation for the value of the cryptocurrency assets.

Pending Issues

28. There are two pending issues in this case:

(a) Whether USDT can be held as property in trust;

(b) Whether ByBit is entitled to summary judgment.

Issue 1: USDT can be held as property in trust

29. Despite the novelty of cryptocurrencies, they have not only been transferred with value, but also appeared on the balance sheets of companies that hold them, as the accounting industry is developing standards for valuing and reporting these assets. The Monetary Authority of Singapore (“MAS”) recently published a consultation paper on proposed amendments to the Payment Services Act that would implement segregation and custody requirements for digital payment tokens: MAS, “Response to Public Consultation on Proposed Regulatory Measures for Payment Token Services” released on 3 July 2023. The proposed amendments reflect the reality of identifying and segregating such digital assets in practice, thereby supporting the view that they can be held as property in trust.

30. Furthermore, cryptocurrencies have been widely recognized as property by the court rules. In Rule 22 of the 2021 Court Rules, which relates to the enforcement of judgments and orders, O 22 r 1(1) defines “chattels” to include “cash, debts, deposits, bonds, shares or other securities, membership of a club or association, and cryptocurrency or other digital currency” [emphasis added]. Therefore, cryptocurrencies are explicitly recognized as a form of property that can be the subject of an enforcement order. Although the individuals who formulated the 2021 Court Rules did not specify the specific method of enforcing such enforcement orders (see Civil Justice Committee Report of 29 December 2017 (Chairman: Judge Cheng Wing Kwong)), it is worth noting that the procedure for serving a detention notice on an individual or entity that owns or controls chattels (O 22 r 6(4)(b)) or registering ownership of intangible chattels (2021 Court Rules O 22 r 6(4)(g)) can logically be extended to cryptocurrencies or other digital currencies.

31. Cryptocurrencies are not classified as tangible assets because we cannot physically hold them like cars or jewelry. They do not have a fixed physical identity. However, cryptocurrencies do manifest in the physical world, albeit imperceptibly to humans. The combination of private and public keys unlocks the previous cryptographic lock and locks the unspent transaction outputs of the cryptocurrency to the public address of the holder on the blockchain. Professor Kelvin Low argues that the right of the private key holder to the unspent transaction outputs (UTXOs) of the cryptocurrency being locked to the holder’s public address on the blockchain is “correctly conceptualized as a narrow right to the cryptocurrency”: see Kelvin FK Low, “Trusts of Cryptoassets” (2021) 34(4) Trust Law International 191. This physical manifestation at the digital bit and byte level is not permanent and changes with each transaction. Nevertheless, we identify what is happening as a specific digital token, somewhat like how we name a river, even though the water in the river is constantly changing.

32. Although some people are skeptical about the value of cryptocurrencies, it is worth noting that value is not inherent in objects. While we say that certain materials are expensive, such as gold being more valuable than wood, this is a judgment made by collective human thinking. It is also a judgment that changes with the environment. On a sinking ship, a floating wooden chair is more valuable than a golden throne.

33. This description of cryptocurrencies suggests that modern humans can define and identify them, enabling them to be traded and evaluated as holdings. They undoubtedly meet the maxim often quoted by Lord Wilberforce in National Provincial Bank v. Ainsworth (1965, 1 AC 1175, p. 1248):

“Before a right or an interest can be admitted into the category of property or of a right which affects property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability.”

34. The next question is whether USDT can be classified as choses in action. The argument that cryptocurrencies should not be classified as choses in action is based on the origin of this category being rights enforceable against a person by action, such as the right to receive payment of money or a debt, or contractual rights. There is no separate counterparty right against cryptocurrency holders. However, over time, the category of choses in action has expanded to include documents evidencing incorporeal property rights and ultimately incorporeal rights, such as copyrights: see W.S. Holdsworth, “The Treatment of ‘Choses’ at Common Law” (1920), 33(8) Harvard Law Review 997. As Holdsworth noted in the introduction to his authoritative article on page 998:

“Clearly, the diversity of things included in the category of choses in action must necessarily lead to a diversity of legal incidents in the various classes of choses in action. Indeed, their legal incidents are very different; because they are themselves different, they must necessarily be treated differently in the courts and legislatures. It is impossible to deal with the law of choses in action as a whole; the various classes of choses in action are usually not dealt with in one comprehensive category, but in the particular branch of law to which they most properly belong. For example, if we wish to learn the law about 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 treatises on those particular subjects.”

35. Holdsworth’s historical survey demonstrates the diversity of intangible property classified as choses in action. This diversity indicates that the category of choses in action is broad, flexible, and not closed. It is precisely these characteristics that explain and prove the maxim often quoted by Justice Fry in Colonial Bank v. Whinney (1885, 30 Ch D 261, p. 285): “Every personal thing is either in possession or in action. The law knows nothing of a third course.”

36. Therefore, my conclusion is that in principle, holders of encrypted assets have an intangible property right recognized by common law as a right in rem, and therefore can be enforced in court. Although some may argue that this conclusion has elements of circular reasoning, as it can also be said that the right to be enforced in court is what makes it a right in rem, this reasoning is not significantly different from how the law treats other social structures, such as currency. It is only because seashells or beads or differently printed banknotes are widely accepted as exchangeable value that they become currency. The acceptance of currency is due to collective acts of trust. This is reflected in the famous observation made by Lord Mansfield in the case of Miller v. Race (1758, 1 Burr 452, page 457), where he noted that something that is “universally accepted by mankind” as currency is endowed with “the credit and circulation of money” in all intents and purposes.

37. ByBit also relies on the current terms of service of USDT, which provide for the contractual right of redemption. Article 3 includes the following provisions regarding the right of redemption:

Tether issues and redeems Tether tokens. Tether tokens can be used, held, or exchanged online as long as someone is willing to accept them. Tether tokens are backed by 100% reserves of Tether. Tether tokens are priced in a range of fiat currencies. For example, if you purchase EURT, your Tether tokens will be pegged to the euro at a 1:1 ratio. 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 used to back Tether tokens is entirely controlled and determined by Tether. Tether tokens are backed by reserves of Tether (including fiat currencies), but the tokens themselves are not legal tender. Tether does not issue Tether tokens based on consideration of digital tokens (e.g., Bitcoin); only fiat currencies are accepted at issuance. To have the right to directly issue or redeem Tether tokens, you must be a verified customer of Tether. This provision has no exceptions. The right to redeem or issue Tether tokens is your individual contractual right. If, due to lack of availability, inability to obtain, or loss of liquidity of any reserves held by Tether to support Tether tokens, it becomes necessary to delay the redemption or withdrawal of Tether tokens, Tether reserves the right to delay the redemption or withdrawal of Tether tokens and reserves the right to redeem Tether tokens by physical delivery through securities and other assets held in reserves. Tether makes no representation or warranty as to whether Tether tokens can be traded on the website at any time in the future or even whether Tether tokens can be traded on the website.

38. The terms of service are governed by BVI law. ByBit has submitted a legal opinion from BVI qualified lawyer Sam Goodman, which states that under BVI law, the contractual right of redemption of USDT held by “verified customers” of Tether Limited can be enforced by bringing a lawsuit against Tether Limited. ByBit relies on this point to support its argument that USDT is a right in rem.

39. In my analysis, this feature of USDT may constitute another transaction that USDT holders may have, but its existence is not necessary for me to conclude that the right represented by USDT itself is a transaction.

Question 2: ByBit has the right to judgment

40. ByBit has submitted that it has established a preliminary case that has overcome the hurdle of proving that there is a good arguable case in order to obtain a worldwide freezing order. On the contrary, Ms. Ho cannot demonstrate a fair or reasonable prospect of a genuine defence.

Jason does not exist

41. The inference that ByBit attempts to draw from all the evidence, namely that Jason does not exist (or at least did not play the role that Ms. Ho claimed he did), is the one that I find to be more likely. There is indeed persuasive evidence that Ms. Ho fraudulently transferred cryptocurrency and fiat assets into her own name. As stated in [25] above, there is direct evidence that Ms. Ho owns the wallet associated with address 1, as well as indirect evidence of her unexplained extravagant behaviour. Taking advantage of her employment relationship with WeChain, which was engaged to handle ByBit’s payroll account, and abusing the trust placed in her, Ms. Ho manipulated the cryptocurrency Excel file and misappropriated cryptocurrency and fiat assets.

Implied trust

42. A constructive trust arises in relation to the stolen assets, and remedial relief can be sought in respect of the 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 the stolen funds can be traced in equity. But in this case, the proprietary interest enforced by the tracing is an implied trust, not a resulting trust. Although it is difficult to find clear authority for that proposition, when property is obtained by fraud the recipient of the fraud is presumed to hold it on trust: the property is recoverable and can be traced in equity. Accordingly, the infant who receives property obtained 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. Funds stolen from a bank account can 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 were to mix USDT with USDT balances in other online custodial wallets or mix fiat assets with other money in her bank account, the constructive trust may still apply: Foskett v McKeown [2001] 1 AC 102.

44. Given my findings on the facts, I declare a constructive trust over the cryptocurrency and fiat assets. ByBit is the legal and beneficial owner of the cryptocurrency. Given the relief I grant based on the constructive trust, I do not need to consider alternative bases for remedial constructive trust and unjust enrichment.

45. ByBit sought a series of property and personal orders based on its investigation, which I now grant as follows:

(a) Declare constructive trust over the cryptocurrency and fiat assets;

(b) Order Ms. Ho to immediately pay ByBit $647,880 (the value of the cryptocurrency assets in Wallets 3 and 4);

(c) Order Ms. Ho to immediately pay ByBit SGD 117,238.46 (the value of the fiat assets);

(d) Order Ms. Ho to immediately transfer all remaining funds in Wallet 1 to ByBit, up to a total of $3,561,840 (the value of the cryptocurrency assets transferred into Wallets 1 and 2);

(e) In relation to the remaining cryptocurrency assets transferred into Wallets 1 and 2 after deducting the transfer amount in (d) (referred to as the “remaining amount”),:

(i) Order Ms. Ho to account for the remaining amount, or any money or funds representing the value of the remaining amount that she already owns or has received, or in any account of any person receiving on their behalf or by their order;

(ii) Order for the tracing of the remaining amount or any part thereof, for the purpose of ByBit tracing and recovering the converted assets or their proceeds (if any);

(iii) Order for Ms. Ho to pay all sums ascertained to be due to ByBit after the liquidation of the accounts.

46. I also calculate interest at the standard annual rate of 5.33% from the date of the transfer of the assets in question by Ms. Ho to the date of judgment, which were paid in [45(b)] and [45(c)].


47. In making this summary judgment in favor of ByBit against Ms. Ho, I also award costs in the amount of $45,000.00 (taking into account the novelty of the legal issues involved and the work done in seeking interim relief, of which the costs are included) and expenses of $11,500.00 to ByBit.

Philip Jeyaretnam

High Court Judge

Quek Wen Jiang Gerard, Kyle Gabriel Peters, Ling Ying Ming Daniel, Mato Kotwani, and Chua Ze Xuan (PDLegal LLC) appeared as counsel for the plaintiffs;

The first to sixth defendants were absent and not represented.