Lui v Huobi Global Limited (CS 124 of 2023) [2025] SCSC 3 (15 January 2025)

Key Facts

Issues

• The court found no causal link between the defendant's fault and the plaintiff's expert report fees, as the fees arose from the plaintiff's investigation into scam activity, not directly from the defendant's actions. This claim was dismissed.
• The court ruled that the defendant cannot legally possess and store the plaintiff's stolen USDT and BTC on its exchange. It ordered the immediate transfer of these assets to the plaintiff's specified cryptocurrency wallets.
• The court assessed if the defendant's failure to exercise due diligence was the sole and immediate cause of the plaintiff's losses. It concluded that the defendant's actions (or omissions) were the primary cause of the plaintiff's damage, as the stolen assets were transferred to and stored on the defendant's exchange without proper scrutiny.
• The court determined whether the defendant's failure to follow due diligence procedures under the Anti-Money Laundering Act, as required by Article 1382(2) of the Civil Code of Seychelles Act, 2020, amounted to a fault. The court found the defendant at fault for not detecting fraudulent transactions and allowing stolen crypto assets to be stored on its platform.

Holdings

• The court dismissed the Plaintiff's claim for USD 25,500 in expert report fees, as it determined there was no causal link between these expenses and the Defendant's fault, noting the scammers were responsible for the theft.
• The court awarded costs in favor of the Plaintiff and ordered service of the judgment on the Defendant through its registered agent in Seychelles.
• The court found the Defendant at fault under Article 1382 of the Civil Code of Seychelles Act, 2020 for failing to comply with due diligence obligations, illegally possessing and storing the Plaintiff's stolen crypto assets, and allowing its platform to facilitate the storage of these assets.
• The court declared that the Plaintiff is the sole proprietor and owner of approximately 7,312,857.43 USDT in wallet 0x46bdfdd513e6dc2887e06ddc028e8e11ed85ea99 and 33.57 BTC in wallet 14hYLwpLqYGMz96KfSFJf4Jxo3QY11agTX. The Defendant is ordered to transfer these assets to the Plaintiff's specified wallets.

Remedies

• The court declared Dr. Samson Lui as the sole proprietor of approximately 33.57 BTC in the wallet 14hYLwpLqYGMz96KfSFJf4Jxo3QY11agTX.
• The court awarded costs in favor of the plaintiff for the action against Huobi Global Limited.
• The court declared Dr. Samson Lui as the sole proprietor of approximately 7,312,857.43 USDT in the wallet 0x46bdfdd513e6dc2887e06ddc028e8e11ed85ea99.
• The court ordered Huobi Global Limited to transfer 7,312,857.43 USDT to wallet 0x2839Bee65d286c898C4d10F7B5FaC8a3b213917B and 33.57 BTC to wallet bc1quxasuyldkk0td8tmy7kv3sq3812z5029wcup49.

Legal Principles

• The court held that the defendant failed to take all reasonable care to ensure the plaintiff's crypto assets were not mishandled, as required under Article 1382(2)(a) of the Civil Code of Seychelles Act, 2020. This failure to comply with due diligence obligations under the Anti-Money Laundering Act constituted a breach of the duty of care.
• The court applied the balance of probabilities standard to assess the plaintiff's claims. The uncontroverted evidence showed the defendant's fault and the causal link to the plaintiff's damages met this standard, as per Article 1382 of the Civil Code of Seychelles Act, 2020.
• The court found the defendant breached their duty of care by not implementing sufficient measures to detect fraudulent transactions, as outlined in Article 1382(2)(a). This breach allowed the defendant to improperly receive and store the plaintiff's stolen crypto assets.
• The court determined the defendant's failure to exercise due diligence was the sole and immediate cause of the plaintiff's damage. This causal link was essential to establish fault under Article 1382(2)(c), which requires an act or omission to be the dominant purpose causing harm.

Precedent Name

• Shani Properties V Oliaji Trading
• Attorney General V/S Labonte
• Emanuel V/S Joubert

Cited Statute

• Civil Code of Seychelles Act, 2020
• Anti-Money Laundering Act

Judge Name

Passage Text

• The Court further finds that the defendant is at fault under Article 1382(2) for failure to comply with its due diligence obligations under the Anti-Money Laundering Act and for allowing its platform to participate, store and keep possession of the plaintiff's stolen crypto currency assets.
• I declare that the Plaintiff is the sole proprietor and owner of the approximately 7,312,857.43 USDT in wallet 0x46bdfdd513e6dc2887e06ddc028e8e11ed85ea99.
• I'm not convinced that the plaintiff has proven on a balance of probabilities that there is a causal link between such expenses [expert report fees] and the acts or fault of the defendant... The said acts of the scammers who stole the crypto currency assets from the plaintiff resulted in the plaintiff commissioning the said Agency in order to trace the said crypto currency assets.