19 May 2023

In Re Babel Holding Ltd and other matters [2023] SGHC 98, the General Division of the Singapore High Court (“Singapore High Court”) considered five applications for scheme moratoria by members of a cryptocurrency group (“BFG”). The Singapore High Court also considered further applications for confidentiality orders sealing the identities and other details of BFG’s creditors.

In granting the moratoria and sealing applications above, the Singapore High Court made a number of observations and holdings on (i) whether group companies could consolidate or pool their assets and liabilities in a scheme of arrangement, effectively overriding the separate legal entity doctrine where companies (even in a group) are treated as having their own separate assets and liabilities distinct from other members of the group, and (ii) when the court should grant confidentiality orders anonymising the names of creditors in a scheme of arrangement.

Allen & Gledhill Partner Alexander Lawrence Yeo acted for the successful applicants.


The volatility of the cryptocurrency market in 2022 led to the liquidity issues of many cryptocurrency exchanges and brokers, including the restructurings of several high-profile cryptocurrency companies.

In June 2022, BFG began its restructuring process, and filed moratorium applications with the Singapore High Court in March 2023 to protect the interest of its creditors and relevant stakeholders, and to give BFG more time to implement the restructuring plan for its estimated US$1.5 billion liabilities worldwide. The moratorium suspended actions by BFG’s creditors and was intended to allow BFG to engage in an innovative restructuring plan involving its assets across multiple jurisdictions.

Key parts of the restructuring plan put before the Singapore High Court in support of the moratorium applications included the following:

  • To convert creditor claims to tokens issued by BFG which will be tradable on the secondary market and be backed by fresh investors and a new business model.
  • One member of BFG becoming a primary co-obligor of the entire group’s liabilities.
  • To make Singapore the centre from which the worldwide restructuring will be run pursuant to the restructuring framework under the Insolvency, Restructuring and Dissolution Act 2018.

The Singapore High Court’s decision

After hearing submissions, the Singapore High Court granted the moratoria sought by BFG. In reaching its decision, the Singapore High Court made several observations and holdings that are important for creditors and other stakeholders in future restructurings and schemes:

  • The Singapore High Court’s ruling indicates that a scheme of arrangement could be proposed based on substantive consolidation, or pooling, of the assets and liabilities of the entire BFG. This is unusual because under Singapore law companies in a group are generally treated as separate legal entities with their own separate assets and liabilities. The Singapore High Court’s decision suggests that a scheme of arrangement could (in appropriate cases) override this general rule.
  • The Singapore High Court further granted confidentiality orders anonymising the names of BFG’s creditors. This is significant because several cryptocurrency restructuring or insolvency filings have led to a contagion effect (otherwise also known as a “knock-on” or “spillover” effect). If the names were not anonymised, the market may adversely view customers listed as having significant exposure to the group, thus causing a “run” on those cryptocurrency players and/or investors by their own creditors. The Singapore High Court’s confidentiality orders should help to mitigate or prevent a contagion effect in BFG’s restructuring filing.

Reference materials

The judgment is available on the Singapore Courts website www.judiciary.gov.sg.