Background
DUP, a British Virgin Islands company operating a crypto-native neobank, engaged DUQ as its chief strategy officer under an independent contractor agreement. On 2 May 2025, DUP transferred 20 million of its native tokens and 500,000 USDT to accounts held by DUQ. DUP said the assets were placed in designated subaccounts for market-making and liquidity purposes; DUQ maintained that they were compensation for her contributions to the company.
After DUQ allegedly refused to return the cryptoassets, which DUP valued collectively at about US$1.25 million, DUP obtained an ex parte proprietary injunction and a worldwide freezing order on 16 February 2026. DUQ applied to set both orders aside. The High Court discharged the worldwide freezing order but maintained the proprietary injunction, prompting DUQ to appeal the latter decision and the amount required to fortify DUP’s undertaking as to damages.
The Court’s Holding
The court dismissed DUQ’s application to set aside the proprietary injunction. Even assuming the arbitration might be seated outside Singapore, granting interim relief was not inappropriate under the International Arbitration Act. The dispute had sufficient links to Singapore because DUQ’s public profile described her work for DUP as hybrid work in Singapore, her frequent visits to Singapore were reimbursed by DUP, and the tribunal had not yet been constituted while the parties disputed whether the arbitration should be seated in Singapore or Hong Kong.
DUP had raised a serious question to be tried concerning beneficial ownership of the cryptoassets, supported by contemporaneous communications about API access and market-making subaccounts. The balance of convenience favored preserving the assets: damages would not adequately protect DUP because the tokens’ value depended on volatile market and business factors and a large disposal could harm the token ecosystem, while DUQ’s loss from being unable to trade could be measured financially. The court also rejected DUQ’s allegations of abuse of process and material non-disclosure.
The court nevertheless required DUP to fortify its undertaking as to damages. DUQ’s proposed loss estimate was too speculative because it assumed highly volatile tokens would lose their value, but notional fortification was justified because DUP had not timely disclosed assets available to satisfy its undertaking and had no assets in Singapore. The court fixed security at US$125,000, payable within three weeks, failing which the injunction would be discharged.
Key Takeaways
- A Singapore court may grant interim relief supporting arbitration even when the seat remains unresolved, provided the dispute has sufficient connections with Singapore and the statutory requirements are met.
- A proprietary injunction may preserve disputed cryptoassets where ownership presents a serious issue and damages would not adequately address risks arising from volatility, ecosystem effects, or disposal of the assets.
- When anticipated losses cannot be estimated reliably, the court may order fair and proportionate notional fortification so that an undertaking as to damages provides real protection without making the injunction practically unavailable.
Why It Matters
The decision applies established proprietary-injunction principles to cryptoassets whose value may extend beyond their market price. It recognizes that disposal of a substantial token holding can affect an issuer’s wider ecosystem, making monetary compensation inadequate and preservation of the specific assets important.
It also supplies practical guidance on notional fortification. Relevant considerations include the strength and enforceability of the existing undertaking, assets available in Singapore, the amount at stake, available indications of possible loss, compliance with procedural requirements, and the need for security that is meaningful but not prohibitive.