in Crypto News
The slow process of regulating and normalizing the status of cryptocurrency continues, with Singapore now recognizing crypto as property for the first time.
The clarification by the Singaporean High Court following a recent legal action aids the city-state’s development as a hub for crypto start-ups.
The plaintiff in the case commenced legal action in order to recover 109.83 Bitcoin & 1497.54 Ethereum, resulting in the High Court confirming that cryptocurrencies satisfy the definition of a property right. The judgment cites the following rationale in arriving at the finding that crypto is property:
- Cryptocurrencies are “definable” and sufficiently distinct such that they can be allocated to an individual account holder on a network.
- Cryptocurrencies are “identifiable by third parties” as private keys are allotted, and in turn they are required to record a transfer on a blockchain.
- Cryptocurrency tokens have “some degree of permanence or stability” given that the underlying distributed ledger technology and network provide stability to them.
- Cryptocurrencies have actively traded markets and this fulfills the criterion of them being “capable of assumption by third parties”.
What this clarification will mean
The judgment is significant in that it demonstrates that courts in Singapore now recognize and protect cryptocurrencies as property. Furthermore, it means that the courts will be prepared to issue disclosure orders against Singapore-based cryptocurrency exchanges to assist victims of crypto theft or fraud.
At a broader level, the clarification helps to provide more certainty for all crypto industry stakeholders within Singapore, and to bolster the city-state’s efforts to foster an environment supportive of digital asset innovation.
Crypto rating company Coincub classed Singapore as the foremost global crypto economy for Q4 2021. It cited positive legislation and the fact that Singapore has the second largest crypto-owning population in the world as rationale for it taking the top spot. Meanwhile, a report compiled by KPMG earlier this year found that crypto/blockchain funding outperformed all other fintech sectors in Singapore in 2021.
No room for complacency
There’s no doubt that Singapore has attracted crypto/blockchain start-ups due to a favorable environment. There is no capital gains tax on crypto whilst the Inland Revenue Authority of Singapore exempted digital tokens from goods and services tax as of Jan 1, 2020.
The island state will need to stay focused if it’s to be fully confirmed in this role over the longer term. The Singaporean government had paved the way towards crypto regulation through the Payment Services Act (PSA). However, licensing under the PSA has been much slower than many in the crypto sector had anticipated.In March the Monetary Authority of Singapore (MAS) placed DeFiance Capital on an investor alert list - generating concern within crypto circles. At the time, Alex Svanevik - CEO of Singapore-based blockchain analytics platform Nansen, tweeted: “Not as crypto-friendly as I thought when I moved here a year ago”.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.