The trust as Singapore's answer to custody risk

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Singapore has no statutory segregation rule for crypto assets in insolvency. Where Swiss law gives the customer of a bankrupt custodian a direct right to the return of tokens under Art. 242a DEBA (Part D, Chapter IV), Singapore law asks a different question. Did the custodian hold the tokens on trust for the customer? If it did, the tokens never formed part of the custodian's estate and the liquidator must hand them back. If it did not, the customer is an unsecured creditor with a claim for the value of what was deposited. Every Singapore platform insolvency since 2022 has turned on that question. The regulator's response in 2024 was to make the trust compulsory for licensed custodians. This chapter explains the law of trusts as it applies to digital assets, the pitfalls that have defeated customers in the cases, and what a trustee or custodian in Singapore should do.

The starting point is that a trust over crypto assets is possible. After ByBit there is no doubt that a token is a thing in action and therefore capable of being trust property.¹ The difficulty lies elsewhere, in the three certainties that every express trust requires. There must be certainty of intention to create a trust, certainty of the subject matter and certainty of the objects. Each has a specific crypto problem. Intention founders on terms of service drafted to preserve the platform's flexibility. Subject matter founders on omnibus wallets in which the coins of thousands of customers are pooled. Objects are rarely a problem for a custody trust, since the beneficiaries are the customers on the platform's books, but become one in protocol treasuries and DAO structures where the class of beneficiaries is open.

Notes

ByBit Fintech Ltd v Ho Kai Xin [2023] SGHC 199 at [36] and [42]–[44]. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

Of Counsel, KGP Legal LLC

I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

I operate across the key financial centres in South-East Asia, the Middle East and Switzerland, with a particular focus on asset protection, international tax and estate planning, as well as trusts, company administration and other fiduciary services. My philosophy is to serve as a trusted advisor working closely with my clients and to help them achieve their commercial objectives.

All Singapore law advice is provided through KGP Legal LLC, an established and duly licensed firm of Singapore advocates and solicitors.

KGP Legal LLC is a medium-sized law firm in Singapore that is capable of providing the full range of legal services and corporate administration work. Please contact me directly at [email protected] if you need any further information.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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