Vicarious liability and employee fraud

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An employer is vicariously liable for the torts of an employee committed in the course of employment, including fraud, where the wrongful act is so closely connected with the employment that it is fair and just to hold the employer liable.¹ ByBit was a case of an employee of a payroll contractor defrauding the exchange itself, so vicarious liability did not arise. The converse case, where a platform's employee diverts customer assets, is the more frequent one. A platform whose employee used her authorised access to the withdrawal system to steal from customers is likely to be vicariously liable. The access was conferred by the employment, and the theft was a misuse of the very function she was employed to perform. The platform's recourse is against the employee and against any insurer. Platforms should know that fidelity cover for crypto theft is expensive and narrowly drawn.

Notes

Skandinaviska Enskilda Banken AB (Publ), Singapore Branch v Asia Pacific Breweries (Singapore) Pte Ltd [2011] SGCA 22 at [75]–[93], adopting the close-connection test for vicarious liability in Singapore. ↩

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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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.

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