SINGAPORE – In a novel case, an American entrepreneur who had more than US$7 million (S$9.6 million) worth of cryptocurrency stolen from him has won a court injunction to stop the unidentified perpetrators from dealing with the misappropriated property.
A worldwide Mareva injunction was also granted by the High Court to freeze the assets of the unknown persons, up to the value of the stolen cryptocurrency.
The court has also ordered two cryptocurrency exchanges operating in Singapore to disclose information and documents relating to accounts that were credited with part of the stolen Bitcoin.
In written grounds of decision issued on Friday (March 4), Justice Lee Seiu Kin said the dispute raised interesting and novel points of law, including whether the court can grant interim orders against persons whose identities are presently unknown.
The names of all the parties have been redacted in the published grounds.
The plaintiff filed a suit in the High Court last year to trace and recover 109.83 bitcoin and 1497.54 ethereum.
He named the first defendants as “any person or entity who carried out, participated in or assisted in the theft of the plaintiff’s cryptocurrency assets on or around Jan 8, 2021, save for the provision of cryptocurrency hosting or trading facilities”.
Prior to the theft, the cryptocurrencies were accessible through two digital wallets that allow a private key to be stored on the user’s mobile phone.
Both wallets employed recovery seeds – a series of randomly generated words – that allow a user to gain access to his cryptocurrencies in the event that his phone was lost or destroyed.
In January last year, the plaintiff and seven acquaintances were on vacation in Mexico.
He was out on the night of Jan 7 and needed some money, so he called one member of the group at his apartment to retrieve some cash from the safe.
He read out the safe combination to the acquaintance, who repeated it while some of the others were in the same room.
The acquaintance brought the cash to the plaintiff, and they returned to the apartment in the early hours of Jan 8.
That evening, the plaintiff discovered that his bitcoin and ethereum had been transferred without his knowledge or consent.