Case Details
- Citation: [2025] SGHC 104
- Court: High Court of the Republic of Singapore
- Date: 2025-06-04
- Judges: Aidan Xu @ Aedit Abdullah J
- Plaintiff/Applicant: (1) Joshua James Taylor, (2) Chew Ee Ling
- Defendant/Respondent: Official Receiver (non-party)
- Legal Areas: Insolvency Law — Administration of insolvent estates
- Statutes Referenced: Restructuring and Dissolution Act 2018
- Cases Cited: [2024] SGHC 31, [2024] SGHC 46, [2025] SGHC 104, [2025] SGHC 52
- Judgment Length: 23 pages, 6,573 words
Summary
This case concerns the distribution of cryptocurrency assets held by a company in liquidation. The joint liquidators of Eqonex Capital Pte Ltd sought orders from the Singapore High Court to deal with unclaimed cryptocurrencies and monies held by the company, including distributing them to customers according to a distribution plan. The Official Receiver disputed the existence of any trust over the cryptocurrencies, arguing they should not vest with the Official Receiver on the company's dissolution. The High Court ultimately dismissed the liquidators' application, finding no trust was created over the cryptocurrencies, which therefore belonged to the customers and should be returned to them.
What Were the Facts of This Case?
Eqonex Capital Pte Ltd was a subsidiary of Eqonex Limited, which operated a digital asset exchange platform called "EQONEX". Customers could open accounts on the exchange and use digital wallets hosted by Eqonex Capital to trade, store, send and receive various digital assets, including cryptocurrencies.
In August 2022, Eqonex Limited announced it would cease operations of the exchange, giving customers until September 2022 to withdraw their digital assets. At the time of the application, the joint liquidators of Eqonex Capital had taken custody of the unclaimed digital assets, including cryptocurrencies held in the company's Nano X hard wallets. Investigations also suggested there were monies in the company's bank account that had likely been converted from a type of cryptocurrency called USD Coins (USDC).
The liquidators commenced an application seeking orders to deal with the unclaimed cryptocurrencies and monies, including distributing them to customers according to a distribution plan. However, the Official Receiver disputed the existence of any trust over the cryptocurrencies, arguing they should not vest with the Official Receiver on the company's dissolution.
What Were the Key Legal Issues?
The key legal issues in this case were:
1. Whether there was a trust, whether express, resulting or Quistclose, over the cryptocurrencies held by Eqonex Capital.
2. Whether any outstanding cryptocurrencies and/or monies should vest with the Official Receiver upon the dissolution of Eqonex Capital, pursuant to section 213(1) of the Restructuring and Dissolution Act 2018.
How Did the Court Analyse the Issues?
On the first issue, the court examined the applicants' arguments that an express, resulting or Quistclose trust existed over the cryptocurrencies. The court was not persuaded by these arguments.
Regarding an express trust, the court found that the terms and conditions governing the customer accounts did not create an express trust over the cryptocurrencies. The court noted the terms were silent on the nature of the holding of the digital assets and did not contain any express declaration of trust.
As for a resulting trust, the court held that the customers had provided the consideration for the cryptocurrencies and therefore held the legal and beneficial title to them. There was no basis to find that Eqonex Capital held the cryptocurrencies on resulting trust for the customers.
The court also rejected the applicants' argument for a Quistclose trust, finding no sufficient evidence that the cryptocurrencies were provided by the customers to Eqonex Capital for a specific purpose. The court held that the cryptocurrencies belonged beneficially to the customers, not Eqonex Capital.
On the second issue, the court noted that the outstanding monies in the bank account would vest with the Official Receiver on dissolution, as this was not disputed. However, the court found it premature to determine whether any outstanding cryptocurrencies should vest with the Official Receiver, as Eqonex Capital had not yet been dissolved. The court held that Eqonex Capital lacked standing to invoke section 213(1) of the Restructuring and Dissolution Act at this stage.
What Was the Outcome?
The High Court dismissed the liquidators' application. The court found that there was no trust, whether express, resulting or Quistclose, over the cryptocurrencies held by Eqonex Capital. As the customers held the legal and beneficial title to the cryptocurrencies, the court ordered that they be returned to the customers.
The court declined to grant the orders sought by the liquidators regarding their proposed trust arrangement and distribution plan. The court also declined to determine whether any outstanding assets should vest with the Official Receiver, as Eqonex Capital had not yet been dissolved.
Why Does This Case Matter?
This case provides important guidance on the treatment of cryptocurrencies in the context of insolvency proceedings. The court's rejection of the existence of any trust over the cryptocurrencies held by the insolvent company reinforces the principle that customers generally hold the beneficial ownership of their digital assets, even when held by a third-party custodian.
The case highlights the need for clear contractual arrangements and declarations of trust when digital asset platforms or custodians hold cryptocurrencies on behalf of customers. In the absence of such arrangements, the court is unlikely to find the existence of a trust, and the digital assets will be considered the property of the customers rather than the insolvent entity.
This judgment also underscores the importance of timely customer engagement and withdrawal of digital assets when a platform ceases operations. The court's reluctance to determine the vesting of outstanding assets with the Official Receiver, due to the lack of the company's dissolution, emphasizes the need for liquidators to expedite the winding up process to provide clarity on the ultimate distribution of unclaimed assets.
Legislation Referenced
- Restructuring and Dissolution Act 2018
Cases Cited
- [2024] SGHC 31 - Lin Yueh Hung (as liquidators of CST South East Asia Pte Ltd (in members' voluntary liquidation)) and another v Andreas Vogel & Partner, Rechtsanwaelte, AV & P Legal LLP and others
- [2024] SGHC 46 - Bybit Fintech Ltd v Ho Kai Xin and others
- [2025] SGHC 52 - Wong Joo Wan (as liquidator of Envy Hospitality Holdings Pte Ltd (in members' voluntary liquidation)) v Lim Siong Heng Raymond and another
Source Documents
This article analyses [2025] SGHC 104 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.