The High Court in the case of Lee Ee Foong v Ong Seow Lee [2025] 10 MLJ 230 ruled that cryptocurrency is a digital asset and is universally accepted as a form of money. Therefore, cryptocurrency bears valuable consideration.
The central issue in this case was whether a friendly loan could be satisfied / repaid through the transfer of cryptocurrency, and whether the lender remained entitled to recover the loan in cash despite having received the digital assets.
BACKGROUND
The Appellant and the Respondent in this case entered into a joint investment for the purchase of cryptocurrency machines (Bitcoin Miner Machines), for the sum of RM140,000.00. As it was a joint investment, both parties invested RM70,000.00 each for the purchase of the machines.
On 4.12.2017, the Respondent paid RM70,000.00 to the Appellant by way of a Public Bank cheque. The said sum was used for the purchase of five machines, and this was within the knowledge of the Respondent.
On or around early 2018, the parties agreed for the said sum to be converted into a friendly loan to the Appellant.
On or around 16.3.2020, to satisfy repayment of the friendly loan, the Appellant transferred 50 units of Litecoins into the Respondent’s Binance wallet account. The Appellant alleged that the 50 units of Litecoins bore the equivalent market value of RM87,134.04.
However, the Respondent filed a claim in the Magistrates’ Court, alleging that the Appellant had failed to satisfy the friendly loan amounting to RM70,000.00.
The Appellant, on the other hand, claimed that the friendly loan had been fully repaid by way of the transfer of 50 units of Litecoins into the Respondent’s Binance wallet account. The Appellant also counterclaimed for the alleged excess sum of RM17,134.04.
The Magistrates’ Court allowed the Respondent’s claim for RM70,000.00 and dismissed the Appellant’s counterclaim for RM17,134.04. Aggrieved by the decision, the Appellant appealed to the High Court.
FINDINGS OF THE HIGH COURT
The High Court allowed the appeal and found that the learned Magistrate failed to consider that the Appellant had paid the friendly loan of RM70,000.00 through the transfer of 50 units of Litecoins into the Respondent’s Binance wallet account.
The High Court held that cryptocurrency is a digital asset and is universally accepted as a form of money, and therefore bears valuable consideration.
The High Court referred to the case of Robert Ong Thien Cheng v Luno Pte Ltd & Anor [2019] 1 LNS 2194, where the High Court held that while cryptocurrency is not “money” or legal tender in the traditional sense, it is nevertheless a form of commodity as real money is used to purchase cryptocurrency. There is value attached to cryptocurrency in the same way as value is attached to shares.
The High Court further referred to the case of Lee Kuang Gen v Tan Sri Dato’ Seri Dr M Mahadevan a/l Mahalingam and other appeals [2024] 1 MLJ 825, where the Court of Appeal held that the definition of “money” is wide enough to encompass not only traditional forms of currency, but also assets that can be readily converted into cash. The Court of Appeal held that this would include gold and cryptocurrencies.
The High Court further found that the learned Magistrate failed to consider the Respondent’s admission that she had no knowledge to manage her Binance account and had requested the Appellant to teach her how to sell the Litecoins in her Binance account.
Accordingly, the High Court held that the 50 units of Litecoins transferred by the Appellant to the Respondent constituted full repayment of the friendly loan for the value of RM70,000.00.
However, the Appellant was not entitled to the counterclaim of RM17,134.04.
JUDICIAL RECOGNITION OF DIGITAL ASSETS
This decision is significant as it recognises that cryptocurrency may constitute valid repayment of a contractual obligation where it is accepted by the receiving party.
The decision also reinforces the Malaysian courts’ recognition that cryptocurrency, although not legal tender in the traditional sense, possesses market value and bears valuable consideration.
Together with Robert Ong Thien Cheng and Lee Kuang Gen, this decision demonstrates that digital assets may give rise to legal rights and obligations, and may be treated as assets with monetary value.
KEY TAKEAWAYS
Cryptocurrency may constitute valid repayment of a friendly loan where the parties accept it as repayment. A lender who receives cryptocurrency without objection may not be able to later deny that repayment had been made.
A party seeking to rely on cryptocurrency as repayment should ensure that there is clear evidence of the transfer, the recipient’s acceptance, and the value of the digital asset at the material time.
Disclaimer: This article is for general information only and does not constitute legal advice or legal opinion. It should not be relied upon as a substitute for specific legal advice. No person should act (or refrain from acting) based on this article without obtaining advice on the specific facts and circumstances. Halim Hong & Quek does not accept responsibility or liability for any loss or damage arising from reliance on this article. Halim Hong & Quek reserves the right to update, amend or withdraw this article at any time. All rights reserved.
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About the authors
Chew Jin Heng
Principal Associate
Dispute Resolution
Halim Hong & Quek
jhchew@hhq.com.my
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Tan Chuin-Loong
Pupil-in-Chambers
Dispute Resolution
Halim Hong & Quek
cl.tan@hhq.com.my
