CLM v CLN: Cryptocurrency Theft, Proprietary Injunction, and Jurisdiction over Unknown Persons
In CLM v CLN, the High Court of Singapore addressed the theft of cryptocurrency and the granting of injunctions against unknown persons. The plaintiff, CLM, sought to recover stolen Bitcoin and Ethereum. The court granted proprietary and worldwide freezing injunctions against the unknown first defendants and ancillary disclosure orders against cryptocurrency exchanges. The court also allowed the joinder of identified individuals and entities as defendants and permitted service out of jurisdiction. The court ultimately granted the plaintiff's applications.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Applications in Summons 2444 and Summons 4880 granted.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court grants proprietary and worldwide freezing injunctions against unknown persons who stole cryptocurrency, addressing novel legal issues.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CLM | Plaintiff | Individual | Applications granted | Won | |
| CLN | Defendant | Other | Injunction granted | Lost | |
| CLO | Defendant | Corporation | Disclosure orders granted | Neutral | |
| CLP | Defendant | Corporation | Disclosure orders granted | Neutral | |
| CPZ | Defendant | Individual | Service out of jurisdiction granted | Neutral | |
| CQA | Defendant | Individual | Service out of jurisdiction granted | Neutral | |
| CQB | Defendant | Corporation | Service out of jurisdiction granted | Neutral | |
| CQC | Defendant | Corporation | Service out of jurisdiction granted | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Plaintiff owned 109.83 Bitcoin and 1497.54 Ethereum, accessible through Exodus and BRD wallets.
- Plaintiff revealed safe combination in Mexico apartment, potentially exposing recovery seeds.
- On January 8, 2021, cryptocurrency assets were withdrawn without the plaintiff's knowledge or consent.
- Stolen assets were transferred through a series of digital wallets.
- 15.0 BTC traceable to the stolen assets was transferred to an account controlled by the second defendant.
- 0.3 BTC traceable to the stolen assets was transferred to an account controlled by the third defendant.
- The fourth and fifth defendants were involved in the transfers of assets traceable to the Stolen Cryptocurrency Assets in rather suspicious circumstances.
5. Formal Citations
- CLM v CLN and others, Suit No 470 of 2021, [2022] SGHC 46
6. Timeline
| Date | Event |
|---|---|
| Plaintiff and acquaintances on vacation in Mexico; plaintiff reveals safe combination. | |
| Cryptocurrency assets withdrawn from plaintiff's wallets without consent. | |
| 15.0 BTC transferred to second defendant's account. | |
| 0.3 BTC transferred to third defendant's account. | |
| Plaintiff's Skeletal Submissions dated. | |
| Summons 2444 heard. | |
| Transactions between 29 June 2021 and 10 July 2021, 0.08432778 BTC traceable to the 0.0996 BTC withdrawn from the third defendant’s account was ultimately transferred to digital wallets owned and controlled by CQB | |
| Transactions between 29 June 2021 and 10 July 2021, 0.08432778 BTC traceable to the 0.0996 BTC withdrawn from the third defendant’s account was ultimately transferred to digital wallets owned and controlled by CQB | |
| 0.00685635 BTC traceable to the 0.0996 BTC withdrawn from the third defendant’s account was ultimately transferred to a digital wallet owned and controlled by CQC | |
| Transactions between 13 October 2021 and 14 October 2021, 0.64360035 BTC of the Stolen Cryptocurrency Assets had been transferred to digital wallets that are associated with the second defendant | |
| Transactions between 13 October 2021 and 14 October 2021, 0.64360035 BTC of the Stolen Cryptocurrency Assets had been transferred to digital wallets that are associated with the second defendant | |
| Plaintiff's Skeletal Submissions dated. | |
| Summons 4880 heard. | |
| Judgment issued. |
7. Legal Issues
- Jurisdiction over Persons Unknown
- Outcome: The court held that it has jurisdiction to grant interim orders against persons unknown, provided the description is sufficiently certain.
- Category: Jurisdictional
- Related Cases:
- [2003] 1 WLR 1633
- Proprietary Injunction for Cryptocurrency
- Outcome: The court held that cryptocurrencies satisfy the definition of a property right and are capable of giving rise to proprietary rights, which can be protected via a proprietary injunction.
- Category: Substantive
- Related Cases:
- [1965] AC 1175
- [2020] 2 NZLR 809
- Worldwide Freezing Injunction
- Outcome: The court granted a worldwide freezing injunction, finding a good arguable case and a real risk of asset dissipation.
- Category: Substantive
- Service out of jurisdiction
- Outcome: The court granted leave to serve the cause papers and relevant documents on the additional defendants out of jurisdiction.
- Category: Procedural
- Related Cases:
- [2014] 4 SLR 500
- Substituted service out of jurisdiction
- Outcome: The court granted the plaintiff’s application for leave to serve the fourth and fifth defendants via substituted means, viz, by way of email.
- Category: Procedural
- Related Cases:
- [2008] 3 SLR(R) 856
8. Remedies Sought
- Proprietary Injunction
- Worldwide Freezing Injunction
- Disclosure Orders
- Monetary Damages
9. Cause of Actions
- Theft
- Constructive Trust
- Unjust Enrichment
- Conspiracy
10. Practice Areas
- Commercial Litigation
- Injunctions
- Asset Recovery
- Civil Litigation
11. Industries
- Financial Services
- Technology
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Bloomsbury Publishing Group Ltd and another v News Group Newspapers Ltd and others | UK | Yes | [2003] 1 WLR 1633 | United Kingdom | Cited as authority for the jurisdiction to grant orders against persons unknown, emphasizing the need for a sufficiently certain description to identify included and excluded parties. |
| Friern Barnet Urban District Council v Adams and others | UK | Yes | [1927] 2 Ch 25 | United Kingdom | Distinguished as a pre-CPR case requiring defendants to be named, contrasting with the flexibility introduced by the Civil Procedure Rules. |
| CMOC v Persons Unknown | Commercial Court (UK) | Yes | [2017] EWHC 3599 (Comm) | United Kingdom | Cited for affirming Bloomsbury and extending the jurisdiction to grant worldwide freezing injunctions against persons unknown in cases of misappropriated funds. |
| Zschimmer & Schwarz GmbH & Co KG Chemische Fabriken v Persons Unknown & Anor | Malaysian High Court | Yes | [2021] 7 MLJ 178 | Malaysia | Cited for granting proprietary and freezing injunctions against persons unknown in a cyber fraud case, following CMOC and emphasizing the absence of prohibitions against such orders in the Rules of Court. |
| Cameron v Liverpool Victoria Insurance Co Ltd | UK Supreme Court | Yes | [2019] 3 All ER 1 | United Kingdom | Cited as affirming CMOC, which was relied upon in granting a proprietary injunction and a freezing injunction against persons unknown. |
| Fauziah bt Ismail & Ors v Lazim bin Kanan & Ors (as person occupying GM 820, Lot 1642, Mukim Kajang, Daerah Hulu Langat, Negeri Selangor Darul Ehsan without the applicants’ consent) | Court of Appeal | Yes | [2013] 5 MLJ 423 | Malaysia | Cited to show that O 89 of the Rules of Court 2012 for summary proceedings for possession of land allows for a defendant reference to persons unknown |
| Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal | Court of Appeal | Yes | [2015] 5 SLR 558 | Singapore | Cited for the requirements to obtain a proprietary injunction and a freezing injunction. |
| American Cyanamid Co v Ethicon Ltd | House of Lords | Yes | [1975] AC 396 | United Kingdom | Cited for the principles applicable to obtaining a proprietary injunction. |
| National Provincial Bank Ltd v Ainsworth | House of Lords | Yes | [1965] AC 1175 | United Kingdom | Cited for the classic definition of a property right. |
| B2C2 Ltd v Quoine Pte Ltd | Singapore International Commercial Court | Yes | [2019] 4 SLR 17 | Singapore | Cited for holding that it was possible for cryptocurrencies to be held on trust, but noting that the precise nature of this property right was left open. |
| Quoine Pte Ltd v B2C2 Ltd | Court of Appeal | Yes | [2020] 2 SLR 20 | Singapore | Cited for canvassing in detail the authorities in support of treating cryptocurrencies as property. |
| Elena Vorotyntseva v Money-4 Limited and others | English High Court | Yes | [2018] EWHC 2596 (Ch) | United Kingdom | Cited as a case that implicitly accepted that cryptocurrency may be regarded as property. |
| Copytrack Pte Ltd v Wall | Supreme Court of British Columbia | Yes | [2018] BCSC 1709 | Canada | Cited as a case that ordered that some C$400,000 worth of ETH be traced, which suggests that ETH was recognised as a species of property susceptible to tracing. |
| Ruscoe v Cryptopia Ltd (in liq) | High Court | Yes | [2020] 2 NZLR 809 | New Zealand | Cited for holding that cryptocurrencies meet the standard criteria to be considered a species of property. |
| Guan Chong Cocoa Manufacturer Sdn Bhd v Pratiwi Shipping SA | High Court | Yes | [2003] 1 SLR(R) 157 | Singapore | Cited for the consideration of whether the defendant has sufficient assets within the jurisdiction to satisfy the prospective judgment. |
| Yuanta Asset Management International Ltd and another v Telemedia Pacific Group Ltd and another and another appeal | Court of Appeal | Yes | [2018] 2 SLR 21 | Singapore | Cited for the principle that a constructive trust arises by operation of law over stolen assets. |
| Sun Electric Pte Ltd and another v Menrva Solutions Pte Ltd and another | High Court | Yes | [2020] 4 SLR 978 | Singapore | Cited for the source of the statutory power to grant interlocutory relief. |
| Bankers Co Trust v Shapira | UK | Yes | [1980] 1 WLR 1274 | United Kingdom | Cited for the principle of Bankers Trust orders, which compel non-parties to provide documents to assist with the applicant’s tracing claim where there was a prima facie case of fraud. |
| Success Elegant Trading Ltd v La Dolce Vita Fine Dining Co Ltd and others and another appeal | Court of Appeal | Yes | [2016] 4 SLR 1392 | Singapore | Cited for the principle of Bankers Trust orders, which compel non-parties to provide documents to assist with the applicant’s tracing claim where there was a prima facie case of fraud. |
| Zoom Communications Ltd v Broadcast Solutions Pte Ltd | Court of Appeal | Yes | [2014] 4 SLR 500 | Singapore | Cited for the requirements that must be satisfied before leave to serve out of jurisdiction is granted. |
| J H Rayner (Mincing Lane) Ltd v Teck Hock and Co (Pte) Ltd and others | High Court | Yes | [1989] 2 SLR(R) 683 | Singapore | Cited for the definition of a 'proper party' in the context of service out of jurisdiction. |
| Spiliada Maritime Corporation v Cansulex Ltd | House of Lords | Yes | [1987] AC 460 | United Kingdom | Cited for the principles in assessing whether Singapore is the most appropriate forum to hear the substantive dispute. |
| Siemens AG v Holdrich Investment Ltd | Court of Appeal | Yes | [2010] 3 SLR 1007 | Singapore | Cited for the principles in assessing whether Singapore is the most appropriate forum to hear the substantive dispute. |
| Bradley Lomas Electrolok Ltd and another v Colt Ventilation East Asia Pte Ltd and others | High Court | Yes | [1999] 3 SLR(R) 1156 | Singapore | Cited for the requirement that the plaintiff has to show that there is a serious question to be tried on the merits of the claim. |
| Petroval SA v Stainby Overseas Ltd and others | High Court | Yes | [2008] 3 SLR(R) 856 | Singapore | Cited for the principles in granting leave for substituted service out of jurisdiction. |
| Bristol Corp. v. Persons Unknown | UK | Yes | [1974] 1 W.L.R. 365 | United Kingdom | Cited to show that persons whose identities are unknown can be described as “persons unknown” in such summary proceedings |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) | Singapore |
| Rules of Court (Cap 322, R5, 2014 Rev Ed) | Singapore |
| Civil Law Act (Cap 43, 1999 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Cryptocurrency
- Bitcoin
- Ethereum
- Proprietary Injunction
- Worldwide Freezing Injunction
- Persons Unknown
- Digital Wallet
- Blockchain
- Recovery Seed
- Private Key
- Constructive Trust
- Disclosure Orders
- Service out of jurisdiction
- Substituted service
15.2 Keywords
- cryptocurrency
- injunction
- bitcoin
- ethereum
- persons unknown
- singapore
- theft
- freezing order
- proprietary injunction
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Civil Practice | 90 |
| Injunctions | 85 |
| Mareva Injunction | 80 |
| Cryptocurrency Law | 80 |
| Cryptocurrency Transactions | 75 |
| Service out of jurisdiction | 70 |
| Joinder | 65 |
| Cybercrime | 60 |
| Property Law | 50 |
| Criminal Law | 10 |
| Criminal Revision | 5 |
16. Subjects
- Civil Procedure
- Cryptocurrency Law
- Injunctions
- Jurisdiction