A. What happened between the parties?
The plaintiff held Bitcoins and Ethereum tokens (the Stolen Cryptocurrency Assets) in two digital, decentralized “hot” (i.e., online) wallets accessible by mobile phone applications and protected with passwords. Both wallets utilized the “recovery seed” methodology to recover passwords and allow access to the wallets in case the plaintiff’s mobile phone was lost or destroyed.
In January 2021, while on vacation with friends in Mexico, the plaintiff gave an acquaintance the combination to his safe to retrieve cash. This safe also contained the recovery seeds to his digital wallets. The acquaintance repeated the safe combination aloud in a room with other people.
The next day, the plaintiff discovered that the Stolen Cryptocurrency Assets, worth approximately $7 million, were withdrawn from his digital wallets without his knowledge or consent. The plaintiff believed that the unknown persons who withdrew the Stolen Cryptocurrency Assets (the First Defendants) obtained the recovery seeds from the safe and used them to transfer the Stolen Cryptocurrency Assets.
The plaintiff’s investigations and tracing efforts indicated that the Stolen Cryptocurrency Assets were transferred to digital wallets that were held at two cryptocurrency exchanges with operations in Singapore (the Second and Third Defendants).
The plaintiff then commenced proceedings in Singapore and requested the High Court to grant the following orders:
- A proprietary injunction prohibiting the First Defendants from dealing with, disposing of, or diminishing the value of the Stolen Cryptocurrency Assets.
- Disclosure orders requiring the Second and Third Defendants to assist with the tracing of the Stolen Cryptocurrency Assets and the identification of the First Defendants.
B. What did the Court decide?
The Court granted the proprietary injunction and the disclosure orders. The Court also granted a worldwide freezing injunction against the First Defendants, even though the identities of the First Defendants were unknown. A summary of the Court’s decision and analysis is set out below.
The Court has jurisdiction over unknown persons
The Court held that it had jurisdiction to grant injunctions against unknown persons as Singapore’s Rules of Court do not require the identity of the defendant to be known. In reaching this decision, the Court referred to English and Malaysian cases decided on similarly worded procedural rules.
Nevertheless, the Court noted that the description of the unknown person(s) must be sufficiently certain as to identify those who do and do not fall within it. In this case, the First Defendants were described as “any person or entity who carried out, participated in or assisted in the theft of the plaintiff’s [Stolen] Cryptocurrency Assets on or around 8 January 2021, save for the provision of cryptocurrency hosting or trading facilities.” The Court held that this description met the required standard of certainty.