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HOW SHOULD CRYPTOCURRENCY LOSSES BE VALUED? SINGAPORE HIGH COURT TIES DAMAGES TO MITIGATION

INTRODUCTION

The question of when to value cryptocurrency losses can be just as important as the question of liability itself. In highly volatile markets, the difference between valuation at the date of breach, a date shortly thereafter, or the date of trial can dramatically change the quantum of damages. That problem is not unique to crypto-assets. Courts have long confronted similar issues in disputes involving shares, securities and other volatile assets. But cryptocurrencies bring the issue into sharper focus because price swings can be more extreme, markets operate continuously, and parties often argue that the rigid application of conventional damages rules does not fairly reflect the realities of digital asset trading. Traditional principles of contract damages require careful adaptation to ensure that compensation is fair, adequate, and does not result in unjust windfalls.
Common law jurisdictions generally recognise the principle that damages for breach of contract are ordinarily assessed as at the date of breach – the so-called “breach date rule” as a starting point. This is based on the assumption that the innocent party would go into the market and obtain substitute performance. But that rule has never been absolute. If its application would give rise to injustice, courts may depart from that rule and fix another date where applying it would cause injustice. The real question, therefore, is not whether courts may depart from the breach date, but what principle should guide that departure.
The recent decision of the Singapore High Court in Kalen, Alexandru v World Exchange Services Pte Ltd [2026] SGHC 31 (“Kalen Alexandru”) provides crucial guidance on this issue. The Court rejected any blanket rule that crypto losses should be valued either at the date of breach or at the date of trial. Instead, it held that the valuation-date inquiry is fundamentally tied to the doctrine of mitigation. Put simply, the relevant date is the point at which the claimant could reasonably have been expected to take steps to reduce its loss.

Factual Background

The claimants in Kalen Alexandru were 85 individuals who owned digital tokens and monies stored with the defendant, World Exchange Services Pte Ltd (“WEX”), which operated the WEX online trading platform. Each claimant had maintained an account on the WEX platform pursuant to a User Agreement. In addition, the defendant had entered into a further arrangement with all claimants under which it was obliged, within two years, to purchase or redeem WEX tokens issued to users at a value equivalent to the digital tokens or fiat currency those tokens represented (the buyback contract).
The dispute arose because, from 12 July 2018, the claimants were unable to control, transfer or withdraw the digital tokens and monies held in their WEX accounts. Although the platform remained accessible through alternative URLs for some time, access deteriorated further in or around November 2018, and by around December 2018 the platform had become entirely inaccessible from any URL.
The claimants commenced proceedings against WEX in September 2023. Summary judgment was entered against the defendant for breach of both the user agreement and the buyback arrangement. The critical issue before the Court was the assessment of damages which involved determining the appropriate date for valuing the claimants’ cryptocurrency losses. 
At the damages stage, the Court identified three issues; first, the quantity of digital tokens and monies held by the claimants as of 12 July 2018; second, the proper valuation date for those losses; and third, the value of those assets at that date. The valuation issue was commercially critical because the value of the relevant assets had shifted dramatically over time. The figures before the Court showed that the aggregate value of the claimants’ assets was about US$10.68 million on 12 July 2018, rose to US$11.97 million at the highest point within three months, fell to US$7.73 million on 1 December 2018, and then climbed to US$46.30 million by 1 June 2025, with an all-time high of US$63.28 million after 12 July 2018.

Court’s Analysis and Holding

On the valuation date, the Court began its analysis by reaffirming the traditional “breach date rule,” under which damages are ordinarily assessed as at the date of breach on the assumption that the innocent party would enter the market to obtain substitute performance. However, the Court emphasized that this rule is not absolute and may be displaced where its application would produce injustice.
The Court then articulated a more fundamental principle: the valuation-date inquiry is “closely intertwined” with the doctrine of mitigation. In the Court’s words, the proper date is the point at which the claimant is reasonably expected to mitigate its losses. That, in turn, depends on matters such as when the claimant knew of the breach, whether substitute performance was possible, and whether it was reasonable in the circumstances to expect mitigating steps to be taken at that stage.
Importantly, in developing this principle, the Court drew support from both Singapore and English authorities. It referred to iVenture Card Ltd v Big Bus Singapore^[1] and the more recent Court of Appeal decision in POP Holdings Pte Ltd v Teo Ban Lim,^[2] both of which underline the connection between the breach-date rule and the law of mitigation. The Court also discussed the UK Supreme Court decision in Stanford International Bank Ltd v HSBC Bank plc,^[3] where Lord Leggatt conceptualised valuation as a mitigation question rather than as a matter governed by any rigid default date. The Court further referred to Southgate v Graham,^[4] the leading recent English decision on cryptocurrency valuation, where Trower J held that the valuation date depends on whether there is an available market and that the injured party should ordinarily enter that market to make a substitute contract to crystallise its loss.
The Court further considered, and ultimately rejected, the application of the so-called “New York Rule,” derived from the United States decision in Diamond Fortress Technologies, Inc. v EverID Inc.^[5] In that case, the defendant failed to deliver cryptocurrency tokens as agreed, and the court assessed damages by reference to the “highest intermediate value” of the asset between the date of breach and a reasonable time thereafter. Although the Singapore High Court acknowledged that the New York Rule reflects the idea of mitigation through the concept of a “reasonable time,” it held that selecting the “highest intermediate value” bears no principled relationship to the possibility or reasonableness of mitigation. In the Court’s view, that methodology risks giving claimants the benefit of perfect hindsight and an undeserved windfall.
Applying its mitigation-based framework to the facts, the Court rejected both of the extreme positions advanced by the parties. It did not accept the defendant’s argument for strict breach-date valuation on 12 July 2018, because it was not reasonable to expect the claimants to mitigate immediately on the very day they first lost access. After all, the WEX administrators had described the problem as “technical” and had suggested that service would resume. On the other hand, the Court also rejected the claimants’ argument for valuation at the date of trial. That would have given them the benefit of later appreciation over a period of years, despite the absence of timely mitigating steps.
Instead, the Court held that the proper valuation point was a reasonable time after 12 July 2018, namely around October or November 2018. By then, the claimants had heard rumours about the possible closure of the WEX exchange, and the platform could only be accessed through alternative URLs before becoming entirely inaccessible by around December 2018. At that stage, the Court considered it reasonable to expect them to begin mitigating their losses.
Importantly, the Court also made clear that mitigation was not limited to buying replacement tokens immediately. It rejected the suggestion that the claimants could only mitigate by entering the market for an exact substitute. The duty to mitigate, the Court said, requires the innocent party to take all reasonable steps, so far as they are not “too difficult”. On the facts, that could have included making formal demands for the return of the assets, commencing legal proceedings, or purchasing at least some substitute digital tokens on other exchanges, especially given the fall in prices between July and December 2018.
The Court also rejected the argument that the defendant’s continuing breach justified present-day valuation. Even if the breach was continuing, that did not displace the claimants’ duty to mitigate. Nor was the Court persuaded that the claimants’ asserted lack of funds to repurchase the full quantity of digital assets eliminated that duty altogether. The problem, in the Court’s view, was not that the claimants were required to perform the impossible, but that they had not taken reasonable steps over an extended period.
As the claimants had not provided precise valuation figures for October or November 2018, the Court adopted a practical proxy. It averaged three values: the value on 12 July 2018, the highest value within the following three months, and the value on 1 December 2018. On that basis, damages were assessed at approximately US$10,126,158.43, far below the amount that would have been recoverable had the assets been valued by reference to their 2025 market level.

ANALYSIS AND CONCLUSION

The significance of Kalen Alexandru lies less in the specific date the Court selected and more in the framework it adopted for making that choice. The judgment makes clear that, in cryptocurrency cases, the valuation date exercise is not a free-floating discretion to select whichever date appears most generous or most conservative. Nor is it a mechanical application of the breach-date rule. It articulates a clear normative philosophy: a claimant has a duty to help itself by taking reasonable steps to minimise harm, rather than allowing losses to accumulate while waiting for a favourable market movement at trial. 
That is a principled and commercially sensible approach. In volatile digital asset markets, allowing claimants automatically to rely on trial-date valuation would risk turning damages into a vehicle for capturing market upside, rather than compensating actual loss. Equally, insisting in every case on the date of breach would ignore situations where the claimant could not reasonably know of the breach, could not reasonably obtain substitute performance immediately, or could still expect the defendant to make good on its obligation. The Court’s mitigation-based model is an attempt to steer a middle course between those extremes.
The judgment is also useful because it clarifies the comparative position across jurisdictions. On the one hand, Singapore and the UK appear increasingly aligned. In both jurisdictions, the analysis is not driven by hindsight, nor by an abstract preference for either the date of breach or the date of trial. Instead, both systems ask a more practical question: when could the claimant reasonably have been expected to step into the market or otherwise take steps to reduce the loss?. On the other hand, the US position discussed in the judgment remains materially different, because the New York rule may permit recovery based on the highest intermediate value within a reasonable replacement period. That divergence will matter in practice. In crypto disputes, where valuation can swing by tens of millions of dollars depending on methodology, questions of governing law, forum selection and remedial strategy may become outcome-determinative.
The decision also has broader implications for future digital asset litigation. Parties will now need to think carefully not only about proving ownership, tracing assets and establishing breach, but also about building a detailed factual record on mitigation. When did the claimant first understand that the problem was real and not temporary? What practical steps could have been taken at that point? Were substitute assets realistically available? Could formal demands, injunctive relief, or protective proceedings have been pursued sooner? These questions may become central in future damages hearings.

^[1] iVenture Card Ltd v Big Bus Singapore [2022] 1 SLR 302

^[2]POP Holdings Pte Ltd v Teo Ban Lim and others [2025] SGCA 51

^[3]Stanford International Bank Ltd (in liquidation) v HSBC Bank plc [2023] AC 761

^[4]Southgate v Graham [2024] EWHC 1692 (Ch)

^[5]Diamond Fortress Technologies Inc v EverID Inc 274 A.3d 287 (2022)

Author: Nitansha Nema & Prateek Bagaria

HOW SHOULD CRYPTOCURRENCY LOSSES BE VALUED? SINGAPORE HIGH COURT TIES DAMAGES TO MITIGATION

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