CHAN WING YAN AND ANOTHER v. JP-EX CRYPTO ASSET PLATFORM PTY LTD AND OTHERS

CHAN WING YAN AND ANOTHER v. JP-EX CRYPTO ASSET PLATFORM PTY LTD AND OTHERS

USDT is property capable of trust; on the pleaded facts the three certainties are satisfied because the Platform segregated balances, retained private keys and made representations amounting to an objective intention to hold users' crypto-assets for their benefit; therefore D2 held the specified USDT deposits on express trust for P1, breached trustee duties by transferring the deposits away, and plaintiffs are entitled to declaratory and injunctive proprietary relief and summary costs on default judgment.

Citation
[2024] HKDC 1628
Parties
1st Plaintiff: CHAN WING YAN; 2nd Plaintiff: LEE SUNG HIM HERBERT; 1st Defendant: JP-EX CRYPTO ASSET PLATFORM PTY LTD; 2nd Defendant: WEB3.0 TECHNICAL SUPPORT LIMITED (FORMERLY KNOWN AS JPEX TECHNICAL SUPPORT CO. PTY LIMITED); 3rd Defendant: HOLDER OF WALLET ADDRESS TNCxvfB7aW4JjgyLph91Mj8FBWHnD77DM8; 4th Defendant: HOLDER OF WALLET ADDRESS TM6tdiP77qsyfTWegZ9sULzwmiev41ySNT; 5th Defendant: HOLDER OF WALLET ADDRESS TM6ezzj72Hyi92g4fDyRXPqF8Y93KMe87L; 6th Defendant: CHIU KING YIN FELIX (趙敬賢); 7th Defendant: PERSONS UNKNOWN WHO CARRIED OUT AND/OR ASSISTED AND/OR PARTICIPATED IN THE SCHEME WHICH CAUSED THE 1ST AND 2ND PLAINTIFFS TO TRANSFER ASSETS TO THE 1ST TO 6TH DEFENDANTS IN THE MANNER AS PLEADED IN THE STATEMENT OF CLAIM
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
29 October 2024
Case Number
DCCJ2977/2024
Procedural Posture
Civil (trust and Alternative Debt Claim Concerning Cryptocurrency Deposits) / Default Judgment Application (inter Partes Summons Under O19 R7 Rdc)
Outcome
Default judgment granted against the 2nd Defendant (Web3.0 Technical Support Limited) on the plaintiffs' primary express trust claim
Legal Topics
Express Trust, Quistclose Trust (alternative), Default Judgment, Proprietary Relief, Injunction, Service of Process
Source Language
EN
Trust Law Property Law Cryptocurrency Law Civil Procedure Injunctive Relief Debt Recovery Express Trust Quistclose Trust (alternative) +4 more

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Parties

CHAN WING YAN

1st Plaintiff

LEE SUNG HIM HERBERT

2nd Plaintiff

JP-EX CRYPTO ASSET PLATFORM PTY LTD

1st Defendant

WEB3.0 TECHNICAL SUPPORT LIMITED (FORMERLY KNOWN AS JPEX TECHNICAL SUPPORT CO. PTY LIMITED)

2nd Defendant

HOLDER OF WALLET ADDRESS TNCxvfB7aW4JjgyLph91Mj8FBWHnD77DM8

3rd Defendant

HOLDER OF WALLET ADDRESS TM6tdiP77qsyfTWegZ9sULzwmiev41ySNT

4th Defendant

HOLDER OF WALLET ADDRESS TM6ezzj72Hyi92g4fDyRXPqF8Y93KMe87L

5th Defendant

CHIU KING YIN FELIX (趙敬賢)

6th Defendant

PERSONS UNKNOWN WHO CARRIED OUT AND/OR ASSISTED AND/OR PARTICIPATED IN THE SCHEME WHICH CAUSED THE 1ST AND 2ND PLAINTIFFS TO TRANSFER ASSETS TO THE 1ST TO 6TH DEFENDANTS IN THE MANNER AS PLEADED IN THE STATEMENT OF CLAIM

7th Defendant

Procedural Posture

Civil (trust and Alternative Debt Claim Concerning Cryptocurrency Deposits) / Default Judgment Application (inter Partes Summons Under O19 R7 Rdc)

Legal Issues

  1. 1 whether USDT deposits constituted property capable of being the subject matter of a trust
  2. 2 whether the three certainties for an express trust are satisfied on the pleaded facts
  3. 3 whether default judgment can be granted for declaratory and injunctive proprietary relief without trial

Ratio Decidendi

USDT is property capable of trust; on the pleaded facts the three certainties are satisfied because the Platform segregated balances, retained private keys and made representations amounting to an objective intention to hold users' crypto-assets for their benefit; therefore D2 held the specified USDT deposits on express trust for P1, breached trustee duties by transferring the deposits away, and plaintiffs are entitled to declaratory and injunctive proprietary relief and summary costs on default judgment.

Court Disposition

Default judgment granted against the 2nd Defendant (Web3.0 Technical Support Limited) on the plaintiffs' primary express trust claim

Orders

  • Declaration that the 2nd Defendant was and is holding 51,999.216164 USDT (1st Wallet) and 195,499.092079 USDT (2nd Wallet) on trust for the 1st Plaintiff
  • Injunction restraining the 2nd Defendant from parting with or dealing with the USDT deposits otherwise than with the consent of the 1st Plaintiff