The applicants, acting as liquidators, sought court approval to distribute unclaimed digital assets and funds held in Eqonex Capital’s custody to customers under a proposed trust arrangement. They also requested indemnity rights and for any remaining assets to vest with the Official Receiver upon the company’s dissolution. The case highlights the tension between liquidators’ practical challenges in distributing unclaimed assets and the legal requirements for establishing trusts in crypto insolvencies. With only a small fraction of Eqonex’s customers engaging in recovery efforts, the liquidators sought a streamlined solution, but the court prioritised strict adherence to trust law principles.

Justice Aedit Abdullah dismissed the application, holding that no trust – whether express, resulting or Quistclose – had been created over the cryptocurrencies. The ruling affirms that customers retain full ownership of cryptocurrencies held on exchanges unless terms explicitly transfer title. This aligns with global trends, such as Hong Kong’s Re Gatecoin Ltd (in liquidation)  (explained further below), where similar disclaimers in terms prevented trust claims. Notably, clauses in the user agreement affirmed that digital assets remained the property of customers and that Eqonex Capital held no fiduciary duties toward them.

The judgment emphasised that mere custodial arrangements or operational controls do not constitute a trust. The court also rejected the argument that the assets should vest with the Official Receiver under section 213(1) of the Insolvency, Restructuring and Dissolution Act, as Eqonex Capital had not yet been dissolved and did not hold title to the assets.

This decision reinforces the principle that digital asset platforms must clearly define asset ownership and fiduciary responsibilities. It also underscores the importance of customer engagement during liquidation, as only a small fraction of Eqonex’s users had responded to recovery efforts.

The Singapore decision mirrors Hong Kong’s approach in Re Gatecoin Ltd (in liquidation), where the court also refused to recognise a trust due to explicit disclaimers in terms. The specific set of terms and conditions that applied to the majority of account holders in Re Gatecoin (in liquidation)  clearly stated the cryptocurrencies were not to be held on trust for the account holders.

The ruling provides critical guidance for insolvency practitioners navigating the complex intersection of cryptocurrency and trust law. While Harneys does not provide legal advice on the laws of Singapore and Hong Kong, the judgments in the Eqonex and Gatecoin liquidations underscore a growing common law consensus: crypto platforms must use unambiguous language to define asset ownership. Liquidators must carefully review the terms and conditions issued by the platform to each account holder to determine whether a trust exists over the relevant cryptocurrencies.