A Singapore judge has ruled that a former employee violated property rights of Bybit exchange when she illegally transferred the exchange’s assets to her own crypto wallets.
The woman allegedly went on a spending spree after transferring $4.2 million to crypto addresses she controlled.
Judge Rules Singapore Woman Violated Property Rights
The Singapore judge ruled the assets stolen from Bybit were covered by a “thing in action” property right reserved for intangible assets. The owner of an intangible asset can stake their claim through legal proceedings instead of possession.
Bybit sued Ho Kai Xin after discovering eight unusual crypto payments in September last year, transferring 4.2 million USDT to four addresses. Additionally, over $100,000 also landed in Ho’s account.
The exchange later froze assets she stole by manipulating spreadsheet files at Bybit’s payroll provider.
The defendant bought a penthouse, a car, and several luxury items, including a Louis Vuitton bag, with the stolen funds. The judge’s ruling mandates she returns the stolen crypto and fiat previously held under trust for Bybit.
“The evidence is indeed compelling that Ho fraudulently transferred the crypto asset and the fiat asset to herself,” he said.
Bybit Ruling Could Define Ownership of Crypto Assets in Future Cases
The judge’s ruling of crypto assets as a “thing in action” is a first for Singapore. It could help legally define the circumstances under which cryptos belong to an individual even if a custodian or trustee holds their assets.
The city-state’s central bank is developing exchange rules to protect customer assets from commingling and theft. The regulations include strict separation of customer and corporate funds.
The case could also affect the ownership status of tokenized assets like investments and debt.
In the US, Custodia Bank CEO Caitlin Long was instrumental in developing cutting-edge state laws defining crypto ownership in her home state of Wyoming. Included under the label “ownership” are both the private keys and the underlying assets the keys can spend.
The new notion of ownership differs from the rights held by the buyer of a security. A security is essentially an IOU passed on from the issuer to the buyer via a broker. At any time, the issuer can devalue the asset and deprive you of what you thought you owned.
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