Case Details
- Citation: [2024] SGHC(I) 32
- Title: Virgilio Tarrago Da Silveira & Anor v Hashstacs Pte Ltd & Anor
- Court: Singapore International Commercial Court (SICC)
- Originating Application No: Originating Application No 7 of 2023
- Date of Judgment: 16 December 2024
- Judges: Simon Thorley IJ
- Hearing Dates: 22–26, 29–30 July, 23 September, 8 October 2024
- Judgment Reserved: Judgment reserved
- Claimants/Applicants: (1) Virgilio Tarrago Da Silveira; (2) Munchetty Investments Ltd
- Defendants/Respondents: (1) Hashstacs Pte Ltd; (2) Soh Kai Jun
- Legal Areas (as pleaded): Tort (misrepresentation; negligence; conspiracy); Restitution (unjust enrichment)
- Key Tort Labels: Fraudulent misrepresentation; negligent misrepresentation; negligent misstatement; negligence; conspiracy
- Key Restitution Label: Unjust enrichment
- Judgment Length: 105 pages; 30,735 words
- Procedural Posture: Originating application in the SICC; claims and defences concerning liability for alleged misrepresentations and related causes of action
Summary
This decision of the Singapore International Commercial Court (SICC) concerns claims arising from the purchase of “STACS Tokens”, a cryptocurrency-like token, by the first claimant, Mr Virgilio Tarrago Da Silveira (“Mr Silveira”). Between August and December 2019, Mr Silveira purchased 8,063,470.53 STACS Tokens on cryptocurrency exchanges, which were worth approximately US$76,000 in total at the time. The tokens were later transferred to a company owned and controlled by him, Munchetty Investments Ltd (the second claimant), in September 2020. The claimants alleged that their investment was induced by representations for which the first defendant, Hashstacs Pte Ltd (“HS”), was responsible, and that those representations were false.
The claimants advanced causes of action including fraudulent misrepresentation, negligent misrepresentation and negligent misstatement against HS, and claims in unjust enrichment and conspiracy against both HS and the second defendant, Mr Soh Kai Jun (“Mr Soh”). They also adduced expert evidence on damages, asserting losses in a range between US$20 million and US$146 million. HS and Mr Soh denied responsibility for the relied-upon statements, denied that the statements were actionable representations, denied falsity and denied fraudulent or negligent conduct. They also denied conspiracy and rejected the unjust enrichment claim, contending that, as matters stood, each defendant had made a loss.
Although the provided extract is truncated, the structure of the judgment indicates that the court methodically addressed multiple issues: whether HS was the relevant representor; whether the statements were actionable; whether the representations were false (and whether they became false over time); whether HS “knew” of falsity at the time or became aware later; whether the representations were made with the intention that they be acted upon by Mr Silveira or a class of persons including token holders; and related issues for negligent misrepresentation and negligent misstatement, unjust enrichment, conspiracy, and damages. The court’s analysis reflects a careful application of established principles governing misrepresentation-based tort claims, adapted to the factual and technical context of distributed ledger technology and token marketing.
What Were the Facts of This Case?
The core factual narrative begins with Mr Silveira’s acquisition of STACS Tokens. Between August and December 2019, he purchased 8,063,470.53 STACS Tokens on two cryptocurrency exchanges. At the time of purchase, the tokens were worth in total around US$76,000. In September 2020, Mr Silveira transferred the tokens to Munchetty Investments Ltd, a company he owned and controlled. The claimants’ case is that this purchase was induced by representations that were made in connection with the STACS token and/or the STACS protocol ecosystem, and that those representations were false.
To understand the alleged misrepresentations, the judgment provides a substantial technical and contextual background on distributed ledger technology (commonly referred to as “blockchain”), tokenisation, and the role of nodes and smart contracts. The court’s inclusion of a detailed technology primer underscores the evidential complexity of token-based schemes: the parties’ dispute is not merely about ordinary statements in a commercial transaction, but about how information about a token and its underlying protocol was marketed and understood by investors, and how that information relates to the technical reality of the system.
The judgment also describes the broader ecosystem in which the STACS protocol and token were situated. It references “GSX”, “GBX”, the “GSX Group”, and Mr Cowan, who was the co-founder and CEO of Gibraltar Stock Exchange Limited (“GSX Ltd”), and later CEO of GSX Group. The court explains that GSX Group pursued a strategy to become a tokenised securities exchange using blockchain solutions. In July 2017, Gibraltar Blockchain Exchange Limited (“GBX”) was incorporated as a majority-owned subsidiary of GSX Group and was established as a utility token sale platform and digital asset exchange licensed under Gibraltar’s Financial Services (Distributed Ledger Technology Providers) Regulations 2017.
Within this background, the judgment addresses the “STACS Protocol and the STACS Token”, including the “first whitepaper”, a “joint venture”, and a “third whitepaper”, as well as the marketing of the STACS protocol. The claimants’ pleaded case, as indicated by the judgment’s headings, also includes subsequent history and changing relationships between participants, including activities of the GSX Group in relation to the STACS protocol and alleged activities of “H Inc” and “HS” that were said to be not in relation to the STACS protocol. Finally, the judgment addresses an “attack on the veracity of Mr Soh”, suggesting that the court had to evaluate credibility and the evidential foundation for claims that Mr Soh and/or HS had misled investors.
What Were the Key Legal Issues?
Issue (C) was framed as fraudulent misrepresentation. The court had to determine, among other things, whether HS was the (or one of the) representor(s) for the statements relied upon by Mr Silveira; whether the representations were actionable in law (ie, whether they were statements capable of founding a misrepresentation claim rather than mere statements of opinion, puffery, or non-actionable material); and whether the representations were false at the time they were made. The court also had to consider whether the representations became false after they were made, and whether HS “knew” the representations were false at the time, or became aware of falsity at a later date.
Fraudulent misrepresentation also required the court to consider intention: whether the representations were made with the intention that they should be acted upon by Mr Silveira or by a class of persons to which Mr Silveira belonged, namely holders of STACS Tokens. This is a critical element because misrepresentation-based liability depends not only on falsity and knowledge, but also on the representor’s purpose in communicating the statements to induce reliance by a relevant class of persons.
Beyond fraud, the court addressed Issues (D) and (E): negligent misrepresentation and negligent misstatement. These issues typically require consideration of duty of care, breach (in the form of failure to exercise reasonable care in making statements), and causation and reliance. The judgment also addressed Issue (F) on unjust enrichment and Issue (G) on conspiracy, and finally Issue (H) on assessment of damages. The presence of multiple causes of action indicates that the claimants sought to establish liability through alternative legal routes, depending on the court’s findings on knowledge, falsity, and the nature of the statements.
How Did the Court Analyse the Issues?
The court’s analysis, as reflected in the judgment’s structure, proceeds in a disciplined sequence. For fraudulent misrepresentation, it first addresses representorship: whether HS was the relevant representor for the statements relied upon. This is often a contested question in cases involving complex corporate structures, marketing materials, and distributed information channels. The court’s approach suggests that it examined the relationship between HS, Mr Soh, and the materials in which the alleged representations appeared, including whether HS authored, approved, disseminated, or otherwise stood behind the statements such that investors could reasonably treat HS as the source of the representation.
Second, the court considered actionability. Not every statement made in a token marketing context will qualify as a legal representation. The court would have had to distinguish between statements that are capable of being treated as representations of fact (or otherwise actionable content) and statements that are not. In the token context, this often includes separating technical descriptions, forward-looking statements, aspirational claims, and general promotional language from specific assertions about the state of the protocol, the existence or performance of systems, or the involvement of identifiable entities.
Third, the court examined falsity at the time of making and whether representations became false later. This is particularly important where token marketing occurs over time and where the underlying protocol or relationships may evolve. The judgment’s headings indicate that the court analysed whether the representations were false when made, and if not, whether they later became false such that continued reliance by investors would be unjustified. This temporal dimension is central to misrepresentation claims because liability may depend on what was known and what was true at the relevant time, not merely on the eventual outcome of the project.
Fourth, the court addressed knowledge and intention. For fraud, the court had to determine whether HS knew the representations were false at the time they were made, and whether HS became aware later. The judgment’s headings show that the court also considered whether the representations were made with the intention that they be acted upon by Mr Silveira or by a class of persons such as STACS token holders. This element links the representor’s state of mind to the reliance of the claimant class, and it is often established through the nature of the marketing materials and the foreseeable audience for the statements.
For negligent misrepresentation and negligent misstatement, the court’s analysis would have shifted from knowledge and intent to reasonable care and duty. While the extract does not provide the detailed reasoning, the headings indicate that the court treated these as distinct issues. Negligent misrepresentation typically requires proof that the representor owed a duty to take reasonable care in making the statement, that the statement was made negligently, and that the claimant relied on it to their detriment. Negligent misstatement similarly focuses on the standard of care in communicating information. In a technology-heavy case, the court would likely have scrutinised what HS (and/or Mr Soh) knew, what they could reasonably have checked, and whether the statements were made with adequate care given the technical claims being marketed.
On unjust enrichment, the court would have analysed whether HS and/or Mr Soh were enriched at the claimants’ expense in circumstances that the law regards as unjust. The judgment’s headings indicate that the defendants denied unjust enrichment and asserted that each had made a loss. This defence is relevant because unjust enrichment typically requires a causal link between the claimant’s transfer (or detriment) and the defendant’s enrichment, and it also requires careful characterisation of the “unjust” factor(s) relied upon by the claimants.
Finally, the court addressed conspiracy. Conspiracy claims in commercial contexts require proof of an agreement or combination to do an unlawful act or to cause damage, and often require that the conspirators share the relevant intent. The defendants denied conspiracy. The court’s analysis would therefore have required it to evaluate evidence of coordination between HS and Mr Soh, and whether any alleged misrepresentations were part of a common design to induce token purchases.
What Was the Outcome?
The provided extract does not include the court’s final dispositive orders or the ultimate findings on liability. However, the judgment’s comprehensive issue-by-issue structure—covering fraudulent misrepresentation, negligent misrepresentation and negligent misstatement, unjust enrichment, conspiracy, and damages—indicates that the court reached determinations on each pleaded cause of action and then proceeded to address damages only if liability was established.
Practitioners researching this case should consult the full text of [2024] SGHC(I) 32 for the court’s final conclusions, including whether the claimants succeeded on fraud, negligence, unjust enrichment, and/or conspiracy, and how the court assessed damages (including any approach to causation, reliance, and quantification in a token investment context).
Why Does This Case Matter?
This decision is significant for lawyers and law students because it illustrates how traditional tort and restitution doctrines are applied to modern distributed ledger and token marketing disputes. The court’s inclusion of a detailed technology background signals that misrepresentation and negligence claims in the crypto/token space require careful translation of technical facts into legal concepts such as “representation”, “falsity”, “knowledge”, “reasonable care”, and “reliance”.
From a precedent and practical standpoint, the case is likely to be useful in future disputes involving token sales, whitepapers, protocol marketing, and investor reliance. The court’s structured approach to fraudulent misrepresentation—representorship, actionability, falsity (including whether statements became false later), knowledge, and intention that a class of investors act upon the statements—provides a roadmap for litigants assessing evidential gaps and legal elements.
For defendants, the case highlights the importance of challenging not only falsity and knowledge, but also whether the defendant is properly characterised as the representor and whether the statements are legally actionable. For claimants, it underscores the need to connect technical marketing materials to legal representations and to establish the causal chain from statement to investment decision to loss. The damages discussion, though not reproduced in the extract, is also likely to be relevant because token investment losses often involve complex valuation and causation questions.
Legislation Referenced
- Gibraltar Financial Services (Distributed Ledger Technology Providers) Regulations 2017 (referenced in the judgment’s background regarding GBX’s licensing framework)
Cases Cited
- (Not provided in the supplied extract. The full judgment should be consulted for the complete list of authorities cited.)
Source Documents
This article analyses [2024] SGHCI 32 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.