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The first Malaysian judgment of precedential value relating to the recovery of mistakenly transferred cryptocurrency, Robert Ong Thien Cheng v LUNO Pte Ltd and BitX Malaysia Sdn Bhd,1 is uncharacteristically short but raises important issues in the law of unjust enrichment. Even within the Commonwealth, this is the first reported case involving an unjust enrichment claim to recover mistakenly transferred cryptoassets.2
In short, Ong was a modern replay of Chase Manhattan Bank NA v Israel-British Bank (London) Ltd3 involving a mistaken transfer of Bitcoins (“BTC”). The claimant cryptocurrency exchange, LUNO, made a second mistaken transfer of 11.3 BTC to an electronic wallet of the defendant, Robert Ong, after having already made a transfer on the same day. LUNO informed Ong of the mistaken transfer the next day. Ong acknowledged his liability to return the additional Bitcoins received and offered, about a month after the transfer, to pay LUNO RM300,000 for the additional Bitcoins. LUNO rejected this offer on the basis that the value of Bitcoins fluctuated from day to day.
LUNO commenced proceedings against Ong to seek proprietary restitution of the Bitcoins, relying on the Malaysian Contracts Act 1950, s.734 which states: “A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it”. 5 The High Court of Malaysia upheld the decision of the Sessions Court in ordering the return of the 11.3 BTC.6 Although the crux of the appeal concerned statutory interpretation, the decision does raise issues of general importance within the law of unjust enrichment. This commentary discusses two main issues: first, whether BTC is a thing, a question that cuts across statutory interpretation as well as the common law concept of “property”; and second, the availability of proprietary restitution.