A question of timing – measuring damages in the cryptocurrency context

In Kalen, Alexandru v World Exchange Services Pte Ltd [2026] SGHC 31 ("World Exchange Services"), the Singapore High Court provided important guidance on the appropriate date of valuation for the assessment of damages in the cryptocurrency context. 

It was held, in essence, that the valuation date should correspond to the point at which the claimant could reasonably have been expected to mitigate its loss. This may be the breach date where the claimant had knowledge of the breach and mitigation was both possible and reasonable at that time, or otherwise a reasonable period after the breach. In this regard, statements made by a cryptocurrency platform in its incident response, such as indications as to when platform services are expected to resume, are relevant to the inquiry.

This marks the first occasion on which the Singapore courts have definitively articulated the principles governing the valuation date for cryptocurrency‑related losses. Prior to this, judicial consideration was limited to obiter remarks in Fantom Foundation Ltd v Multichain Foundation Ltd and another [2024] SGHC 173, where the Singapore High Court observed that, given the inherent volatility of cryptocurrencies, the breach date rule may not invariably provide the most appropriate valuation methodology in all cases.

The clarity provided by World Exchange Services is timely and welcome in light of the growing use of cryptocurrencies and the corresponding rise in disputes involving digital assets. The formulation of definitive principles for determining the valuation date ensures certainty for both cryptocurrency platforms and users alike.

The valuation date issue in World Exchange Services

The claim was a representative action brought on behalf of 85 individuals who maintained accounts with the online digital token trading platform operated by the defendant. The claimants obtained summary judgment against the defendant for breach of the user services agreement and a buyback agreement, arising from the defendant's failure to permit the claimants to access their stored digital tokens and monies, and to buy back tokens held by the claimants. 

The claimants contended that the appropriate valuation date was the date of trial, arguing that valuing the cryptocurrencies at the breach date would effectively compel them to liquidate their holdings at a loss. The defendant, on the other hand, maintained that there was no basis to depart from the general rule that damages should be assessed as at the breach date.

The formulation of the valuation date in cryptocurrency-related losses 

The Singapore High Court applied the well-established contract law principle that damages should be assessed by reference to the point in time when the claimant could reasonably have been expected to mitigate its losses. Accordingly:

• The valuation date may be the breach date if the claimant had knowledge of the breach and it was possible and reasonable at that time to take steps to mitigate its losses; or
• The valuation date may be a reasonable time after the breach if the claimant did not have knowledge of the breach and/or it was not possible or reasonable to take steps to mitigate its losses at the time of breach. 

In adopting this approach, the Singapore High Court declined to apply the widely cited "New York rule" which measures damages by reference to the highest intermediate value reached by the asset between the time of the wrongful act and a reasonable period thereafter.

The appropriate valuation date in World Exchange Services

On the facts, it was held that the appropriate valuation date was in the months after the claimants discovered their inability to control, transfer or withdraw digital tokens and monies. This was driven by two key considerations:

• The claimants could reasonably have believed that their inability to operate on the platform was temporary and that services would resume in due course. In particular, the platform administrators had characterised the disruption as a “technical” issue and indicated that users’ ability to withdraw their digital tokens and monies would be restored.
• It was reasonable for the claimants to take steps to mitigate their losses (e.g. by commencing legal proceedings or acquiring substitute digital tokens on other exchanges) in the months that followed. By that time, the platform was no longer accessible via its usual link and there were rumours concerning its possible closure.

Key takeaways for parties dealing with cryptocurrencies and digital assets in Singapore

The decision in World Exchange Services presents significant takeaways for both platform operators and users:

For platform operators

• The valuation risk is tied to mitigation and not market peaks – the damages will be assessed by reference to when users could reasonably have been expected to mitigate their losses, and not to the highest market value during platform disruptions. 
• It is important to ensure careful messaging during platform disruptions – statements describing outages as temporary or technical suggest that services will resume shortly and may defer the time at which users are expected to mitigate losses. 

For platform users 

• The requirement to mitigate depends on the nature of the platform disruptions – users may be afforded a reasonable period to assess whether disruptions are temporary, particularly where the platform indicated that services would resume. 
• It remains essential to mitigate – once it becomes clear that access to the platform is unlikely to be restored, users are expected to take reasonable steps to mitigate, such as acquiring substitute assets or pursuing legal remedies. 

This signals a continued willingness by the Singapore courts to apply established common law principles in a calibrated manner to disputes involving cryptocurrencies and digital assets. Moving forward, parties dealing with cryptocurrencies and digital assets in Singapore can expect greater judicial scrutiny of conduct undertaken by platform operators and users following platform disruptions. 

How we can help you in matters involving cryptocurrencies and digital assets

Prolegis LLC has significant experience in disputes relating to cryptocurrencies and digital assets. We frequently act for parties in user disputes and to prosecute as well as resist asset recovery actions. If you want to find out more, please contact the authors Daniel Chia and Charlene Wee, or your usual Herbert Smith Freehills Kramer Prolegis contact.

Prolegis LLC and Herbert Smith Freehills Kramer LLP are members of a Formal Law Alliance in Singapore marketed as Herbert Smith Freehills Kramer Prolegis Alliance.