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The Use of Trusts to Avoid Creditors in Insolvency: Lessons from the Insolvency of Cryptocurrency Platforms

Danny Quah

[2020] SAL Prac 21

Trusts are sometimes used as part of asset-protection strategies to avoid creditors in insolvency situations. In the context of cryptocurrency platforms, the recent decisions of David Ian Ruscoe & Malcolm Russell Moore v Cryptopia Ltd [2020] NZHC 718, Quoine Pte Ltd v B2C2 Ltd [2020] 2 SLR 20 and B2C2 Ltd v Quoine Pte Ltd [2019] 4 SLR 17 have put the spotlight on the use of trusts for this precise purpose. This article will examine the contrasting approaches of the New Zealand and Singapore courts in determining whether a trust exists to protect the settled assets, and set out the key takeaways from the use of trusts to avoid creditors in insolvency situations.