Chiang Chi Hang v. Jiang Ronghua

DCCJ 1301/2021

[2026] HKDC 586

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1301 OF 2021

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BETWEEN

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JUDGMENT

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1.This is the trial of an action commenced by the Plaintiff (“P”) against the Defendant (“D”) for, inter alia, breach of an agreement made between P and D on or about 9 October 2020 whereby if NF Coins (“NFC”) could not perform initial coin offering (“ICO”) and be successfully listed in a centralized cryptocurrency exchange not later than the end of November 2020, D should refund P by paying P the 100 Ethereum tokens (“ETH”) transferred to D for the purchase of 880,000 NFC (ie 8,800 NFC x 100) on 11 and 12 October 2020.[1] (the “Refund Agreement”)

2.D had been legally represented by his solicitors, Wong & Co, until 23 January 2026 when he gave notice to the Court, P’s solicitors and his solicitors that he would replace his solicitors to act in person in this action. By the same notice, he informed the Court of his service address, ie Flat 1304, Bik Yuk House, Po Shek Wu Estate, 21 Choi Yuen Road, Sheung Shui, New Territories, Hong Kong (“D’s Service Address”). [2] In other words, when leave was granted on 11 February 2025 to set down this action for trial in the Fixture List commencing on 23 March 2026 at this Court[3] and when the Pre-trial Review of this action took place on 19 January 2026[4], D was legally represented.

3.On the 1^st day of the trial, P was represented by Mr Matthew Ho (“Mr Ho”) of Counsel and D was absent.

4.Mr Ho invited the Court to proceed with the trial of this action in the absence of D and referred the Court to the Affirmation of Service of Lam King Yin filed on 16 February 2026 (the “Service Affirmation”). By the Service Affirmation, the Court was informed that the documents relating to this action in particular the Order of the Pre-trial Review, the Trial Bundle and P’s written Opening Submissions have been served on D by posting to or inserting the same through the letter box of D’s Service Address.

5.Having been satisfied that D had been properly given notice of the trial dates and that D had been served with the Trial Bundle, I ordered the trial of this action to be proceeded with in the absence of D pursuant to Ord 35, r 1 of the Rules of the District Court (“RDC”). P may proceed to prove his claims.

P’S APPLICATION FOR RE-AMENDMENT OF REPLY AND DEFENCE TO COUNTERCLAIM

6.Before Mr Ho opened P’s case, he asked the Court for leave to re-amend P’s Reply and Defence to Counterclaim as per copy of the draft Re-Amended Reply and Defence to Counterclaim annexed to P’s Summons filed on 26 January 2026[5] (the “Amendment Summons”).

7.Although the application was made at the 11^th hour of this action, the amendment sought to be made did not plead to rely on any new factual matters, but pleaded to rely on estoppel premised on the material facts already pleaded as an additional defence to D’s Counterclaim[6].

8.Although no affirmation of service has been filed by P to prove service of the Amendment Summons, Mr Ho nevertheless informed the Court that the Amendment Summons had been served on D by sending the same by post to D’s Service Address on 26 January 2026.

9.I have given the Amendment Summons some thought. On the one hand, the application is a very late application and set up a new defence for the first time. There is no explanation as to why such application was not asked for on an earlier occasion. On the other hand, the new plea of defence is only a plea of a legal consequence of a set of facts already pleaded in the Amended Defence to Counterclaim and would not have caused prejudice to D had he elected to attend trial. Balancing every relevant factor in this case, I came down in favour of allowing the Amendment Summons.

10.Accordingly, upon the P’s solicitors’ undertaking to file an affirmation of service proving service of the Amendment Summons on D in the way as submitted by Mr Ho at trial, I made an Order in terms of paras 1, 2 and 3 the Amendment Summons and the costs of the application under the Amendment Summons be paid by P to D in any event.

11.In compliance with the aforesaid undertaking, P’s solicitors filed the Affirmation of Service of Or Wai Sum Agnes (clerk to P’s solicitors) on 24 March 2026, proving service of the Amendment Summons on D in the way as submitted by Mr Ho at trial.

P’S PLEADED CASE[7]

12.On or about 9 October 2020, P and D entered into an agreement whereby P agreed to transfer 100 ETH to D in return for 880,000 NFC (ie 8,800 NFC x 100) from D (the “Agreement”).

13.Before the Agreement was entered into, D represented to P the following:

(a) NFC was a new cryptocurrency which was about to be issued by its issuer through ICO.

(b) Under ICO, NFC would be available for subscription in 2 ways, namely:

(i) through private subscription by certain group of designated subscribers at the rate of 11,000 NFC per ETH; and

(ii) through public subscription at the rate of 6,600 NFC per ETH.

(c) Since D was eligible for private subscription[8] and P was not, it would be mutually beneficial if D could subscribe for NFC by way of private subscription and transfer the same to P at a premium.

(d) In order to place the aforesaid private subscription, P would transfer 100 ETH to D, among which:

(i) D would deploy 80 ETH to acquire 880,000 NFC by way of private subscription and then transfer the same to P; and

(ii) D would pocket the remaining 20 ETH for his own benefit and as his own commission.

(e) By or before the end of November 2020, NFC would be:

(i) able to perform ICO; and

(ii) successfully listed in a centralized cryptocurrency exchange market (“Listing”).

(f) While D was confident that ICO and Listing could be completed by the end of November 2020, there was also a real chance that they might not be completed or performed by the end of November 2020 (the “ICO/Listing Risk”).

14.Before the Agreement was entered into, the ICO/Listing Risk concerned P on the following grounds:

(a) The value of ETH was highly fluctuating and volatile. The longer the time the 100 ETH was held by D for the private subscription purpose, the higher the risk that the value of the 100 ETH might suffer from the price fluctuation.

(b) Before the Agreement was entered into, the 100 ETH, which P intended to transfer to D, was deposited in a time deposit account at a crypto trading platform earning interest at a rate between 35% to 41% per annum. If the 100 ETH was to be held by D for an unduly long period of time, P would suffer from a loss of interest income.

15.In order to address the aforesaid P’s concern and to induce P to enter into the Agreement, P and D reached the Refund Agreement in that:

(a) D would, in the event that ICO and/or Listing failed to complete by the end of November 2020,

(i) fully refund P the 100 ETH; and

(ii) pay any loss and damage to P in the form of loss of interest arising from the 100 ETH; and

(b) The refund and compensation for the loss and damage to P should be paid in ETH, not in any other form of cryptocurrency.

16.In order to induce P to enter into the Agreement, D further promised that if the value of NPC dropped below the exchange price in para 12 above, D would indemnify P against the difference in value (the “Indemnification Agreement”). D referred this as “保底”.

17.Pursuant to and in reliance on the matters mentioned in paras 12-16 above, P transferred 100 ETH to D by 2 tranches, each of 50.0005 ETH to D’s designated crypto address on 11 and 12 October 2020. The 0.0005 ETH of each tranche was the handling charge of the trading platform.

18.By 30 November 2020, NFC could not perform ICO and neither could NFC be successfully listed in a centralized cryptocurrency exchange market. Therefore,

(a) the Agreement was rescinded due to failure of object; or alternatively

(b) the Agreement was terminated by the parties’ mutual agreement and in any event by P’s acceptance of D’s repudiation on 25 March 2021.

19.On 13 January 2021, D made a refund of 44,000 Tether Coins (“USDT”) (equivalent to about 35 ETH on 13 January 2021) to P.

20.D did not and still does not make any further refund or compensation to P despite repeated requests and demands by P (including a demand made by P through electronic message on 18 January 2021).

21.D has been in breach of the Refund Agreement in that:

(a) D has failed to make any refund to P in ETH;

(b) D has only made a partial refund of 44,000 USDT (equivalent to about 35 ETH) to P and has failed to refund the outstanding 65 ETH to P;

(c) D has failed to make any compensation to P at all.

22.In the premises,

(a) P is entitled to specific performance of the Refund Agreement. In particular:

(i) P is entitled to an order for the transfer of 65 ETH by D to P; and

(ii) P is entitled to compensation by D for the loss of interest arising from the 65 ETH at a sum to be assessed (the “Specific Performance”);

(b) D has unlawfully held the outstanding 65 ETH and any proceeds or profits arisen or derived therefrom as constructive trustee or a trustee of Quistclose trust for and on behalf of P;

(c) D has been unjustly enriched by having in his possession the 65 ETH at the expense of P and is liable for restitution of the 65 ETH to P;

(d) D is liable to account to P for all proceeds and/or profits derived from the 65 ETH unlawfully held by D on behalf of P;

(e) D is liable to pay equitable compensation to P in respect of its loss and damage to be assessed; and

(f) Interest pursuant to sections 49 and 50 of the District Court Ordinance, Cap 336.

23.P claims the following reliefs:

(a) The Specific Performance;

(b) A declaration that D held and still holds the 65 ETH as constructive trustee or a trustee of Quistclose trust for and on behalf of P;

(c) An order for repayment and/or restitution of the outstanding 65 ETH to P;

(d) An account and inquiry of the 65 ETH held by D including all profits and/or proceeds derived therefrom;

(e) An order for payment of all sums due to P upon taking of an account and inquiry;

(f) Damages (the “Common Law Damages”) or equitable compensation to be assessed; and

(g) Interest.

D’S DEFENCE & COUNTERCLAIM PLEADED[9]

24.D denied the Agreement and the representations referred to in para 13 above. D pleaded the following:

(a) In around mid-2020, P and D were acquainted with each other through online platform[10] for discussion on cryptocurrency investment. Since then, they often had had discussion on cryptocurrency investment and shared their views on the potential of different coin tokens.

(b) In around September 2020, P and D discussed about NFC. D expressed his intention to invest in NFC and shared the market news in relation to NFC with P.

(c) P and D also had a discussion[11] on the refund policy offered by the issuer of NFC[12] (the “Issuer”) in that should any investor wish to withdraw its investment prior to Listing, the Issuer should make refund in USDT. The refundable amount would be the amount of USDT equivalent to the amount paid by the investor in ETH when subscription of NFC was made.[13]

(d) P indicated that he was also interested in investing in NFC. But he was worried about the complication in subscribing for NFC. P asked whether he could join in D’s subscription so that P would not have to subscribe himself. Initially, D was reluctant. Upon repeated requests by P[14], D eventually agreed to subscribe for 880,000 NFC for 100 ETH for P and to subscribe for 88,000 NFC for 10 ETH for P’s friend, Mr Neil Chui[15] (“Mr Tsui”). D himself also subscribed for 88,000 NFC for 10 ETH.

(e) P’s 880,000 NFC and Mr Tsui’s 88,000 NFC were transferred by the Issuer to, and, at the request of P[16] and Mr Tsui, kept in D’s cryptocurrency wallet.

(f) All information of NFC was relayed by D to P, not representations made by D on his own accord. Such information was all along openly available on the official website of the Issuer at https://nfcoin.io (the “Website”). D had asked P to read the Issuer’s announcements directly on the Website from time to time. The Website was later shut down by the Issuer in around early 2021.

25.According to the information released by the Issuer on the Website, the subscription of NFC before Listing was to proceed in 2 phases in the plan set out by the Issuer. In the first phase, a discounted price of 1 ETH for 8,800 NFC would be offered to early subscribers. In the second phase, a market price of 1 ETH for 6,600 NFC would instead be offered to latecomers. The aforesaid information was openly available on the Website and was relayed by D to P. D also asked P to visit the Website himself. P could be an early subscriber to subscribe for NFC in the first phase himself, but elected to make subscription through D in the end.

26.D admitted that he relayed the relevant information from the Website to P that ICO and Listing could be completed by the end of November 2020 and that there was also a chance that they might not be completed or performed by the end of November 2020

27.D however denied the time for ICO and Listing was a representation made by D to P, but simply a relaying of information by D to P with the original source of such information from the Website.

28.D denied the Refund Agreement. D further pleaded the following:

(a) The Issuer’s refund policy was offered by the Issuer instead of D personally.

(b) The Issuer’s refund policy was in place regardless of whether P had any concern or intention to subscribe for NFC.

(c) The Issuer had prepared an understanding whitepaper and had uploaded the same on the Website. D had asked P to read the Issuer’s announcements directly on the Website from time to time.

29.D admitted that he relayed the Issuer’s arrangement regarding indemnification “保底” to P.

30.D however denied that such utterance of indemnification “保底” to P was a representation made by him to P. D further pleaded the following:

(a) The Issuer’s refund policy - Indemnification “保底” only meant that should any investor wish to withdraw its investment prior to Listing, the Issuer should make refund in USDT equivalent to the amount paid by the investor in ETH when subscription for NFC was made.

(b) The aforesaid information was all along openly available on the Website and D had asked P to read the Issuer’s announcement directly on the Website from time to time.

31.D admitted that P had transferred 100 ETH to D on or around 10 and 11 October 2020 for the purpose of subscribing for NFC as pleaded in para 24(d) above. Prior to the aforesaid transfer, it was a common understanding between D and P that P should bear his own risks in the NFC investment.

32.D had utilized the 100 ETH to subscribe for 880,000 NFC for P.

33.D admitted that there was no Listing. D further pleaded that there was no Listing because of the global pandemic and that the investors including P had been kept informed of it throughout the entire period between October and December 2020.

34.D admitted that D transferred 44,000 USDT to P on or about 13 January 2021, but denied that such transfer was a partial refund. D further pleaded the following:

(a) Soon after subscribing for NFC, P repeatedly enquired with D about whether NFC was profit making.

(b) After each enquiry, D informed P of the performance of NFC and encouraged P to visit the Website to obtain information regarding NFC.

(c) In around mid-November 2020, P indicated to D his intention to withdraw from the NFC investment.

(d) In around December 2020, P confirmed to D that he wished to withdraw from the NFC investment and activate the Issuer’s refund policy.

(e) D therefore contacted the Issuer about P’s withdrawal and applied for refund under the Issuer’s refund policy.

(f) The Issuer agreed to refund in the amount of 44,000 USDT, comprising of 37,000 USDT (100 ETH x 370 USDT) calculated on the basis of 1 ETH for 370 USDT on around 10 October 2020 when P subscribed for the 100 ETH, and an additional 7,000 USDT issued by the Issuer at its discretion to compensate P for the rise in value of ETH.

(g) On around 13 January2021, D informed P that 44,000 USDT had been transferred from the Issuer to D pursuant to the Issuer’s refund policy.

35.D also sought to set off the sum counterclaimed by him against P’s claim.

36.P bears no burden of disproving the counterclaim. Since the burden of proving the counterclaim falls squarely on D, the absence of D from the trial means that there is no evidence from D to prove his counterclaim. I do not see the need to refer to D’s counterclaim pleaded.

EVIDENCE

37.P has testified at trial and, save for some amendments made, confirmed that the content of P’s Witness Statement was true and accurate. P also adopted his witness statement as his evidence in chief.

P

38.Briefly, P’s evidence on his claim is as follows:

(a) P began investing in cryptocurrencies in about 2020. Like many beginners, he mainly invested in established and mainstream cryptocurrency tokens such as Bitcoin, USDT and ETH.

(b) In or about May 2020, P came to know D through the investment talks organized by ABU, a crypto-investment union introduced by P’s friend, Mr Tsui. D was an experienced crypto-investor who sometimes held talks and coaching sessions in ABU to share his experience on crypto-investments. Due to his experience and standing in ABU, D was often called “大師兄” by P and other members of ABU. D also had a nickname called “鹹魚” or “salt fish”.

(c) During a group gathering held in or about September 2020, D told P privately that he was about to invest in “something nice” (正嘢) but said it would be inappropriate to explicitly discuss it in the venue as it would not be welcomed by the chairman of ABU and another. D then invited P to meet up on another occasion when D would tell P more about the details of the said potential investment.

(d) On about 9 October 2020, D and P met up in a restaurant in Lok Fu for hotpot lunch to further discuss the potential investment. The lunch was joined by Mr Tsui. During the lunch, D informed P that he was involved in a potential project of ICO of NFC, a new cryptocurrency. According to D, NFC would be a profitable investment because, as newly issued cryptocurrency, NFC had good potential to increase its value exponentially within a short period of time after ICO, and investors would have the opportunity to earn multiple times of profits. D also told P that he had reliable information about the investment potential of NFC because he had good connection (and had indeed co-operated) with an insider of the project in the mainland China called Zhong Zi Wei (鍾滋蔚) (“Mr Zhong”), who was widely-known as “Joe Zhong” by those active in the cryptocurrency circle. D further told P that, NFC would be able to perform ICO and Listing not later than the end of November 2020. D further informed P and Mr Tsui that since he had special connection with Mr Zhong, P and Mr Tsui would be able to get a special rate if they “subscribed” for NFC through him. D also reminded them not to divulge this information within the ABU. D also said that he would send them more details about NFC, but reminded them that given the imminent Listing, they would have to act fast since otherwise they would miss the sharp rise in value of NFC after ICO.

(e) Shortly after the lunch, D sent P a message via WhatsApp setting out the details of ICO and further information about NFC. In the said message, P came to understand that:

(i) A total amount of 80 million NFC would be issued. 13 million NFC could be subscribed through private subscription (私募), 20 million NFC could be subscribed through public subscription (公募) and the remaining NFC would be available for acquisition by “mining” (挖礦) (which P believed should bear similar meaning to the concept of “mining”’ under Bitcoin, ie the process of generating new tokens through resolving complex mathematical problems using computing power (算力)).

(ii) At the present stage, NFC could be acquired through private subscription, which would only be open to some designated investors who had connection with the Issuer at the rate of 11,000 NFC per ETH (“现阶段為封闭式私募阶段，仅合作社区可參与私募领取份额。私募为1ETH：11000NFC”).

(iii) Subscription of NFC would subsequently be available to other public investors through a platform called “Bounce” at the rate of 6,600 NFC per ETH (公募將在币安投资的Bounce平台进行。比例为1ETH：6600NFC).

(iv) After public subscription, NFC would be open for trading in a platform called “UNIswap” (which to P’s understanding was a decentralized trading platform) and subsequently (and ultimately) to a centralized trading platform (完成公募后，将首发登陆UNIswap进行交易。而后登陆中心化交易所).

(f) P had asked D whether P was eligible for the private subscription. In response, D told P that D was the only person within the ABU eligible for the private subscription. However, D told P that he could offer D and Mr Tsui a special rate of 8,800 NFC per ETH if they “subscribed” through him. D further detailed the arrangement and P came to understand the following:

(i) Say 100 ETH, P would have to transfer the 100 ETH to D, who would then deploy 80 ETH to subscribe for 880,000 NFC (80 x 11,000) from the Issuer by way of private subscription.

(ii) The remaining 20 ETH would be pocketed by D as his own commission and for his own benefit.

(iii) P did not subscribe for NFC himself, but purchased from D NFC subscribed by D through private subscription.

(iv) The arrangement would be mutually beneficial to P and D, since the arrangement was the better alternative available to P (comparing to the public subscription), while D would be able to profit from it.

(g) At that moment, P intended to invest about 10 to 20 ETH in acquiring NFC.

(h) Although D told P that he was confident that ICO and Listing could be completed by the end of November 2020, D nevertheless agreed that there might be a chance that they might not be completed or performed by that time due to various unforeseeable reasons. This became P’s concern as well because NFC could only be subscribed by ETH of which the value was highly fluctuating and volatile. To lock up 100 ETH for 1 to 2 months for ICO and Listing would mean that P might miss out on investment opportunities. Furthermore, P’s ETH were deposited in a time deposit account held by P at JPEX (a cryptocurrency trading platform), earning a special interest rate generally stood at about 41% per annum. If ETH was withdrawn from the time deposit account and locked up with D, P would be deprived of the interest generated from the JPEX platform.

(i) P have made phone calls to D to relay the aforesaid concerns to him. In response, D made proposals, culminating in the Refund Agreement.

(j) Before P agreed to D’s proposals and came to the Refund Agreement, P expressly told D that his ETH were then deposited with JPEX. It was understood and agreed that D would compensate P’s loss of interest in accordance with the JPEX interest rates. In fact, it was D who introduced P to deposit the ETH in the time deposit account held by P with JPEX in about July 2020.

(k) P also told D about his concern that the value of NFC might drop below the value agreed under the arrangement mentioned in para 38(f) above upon Listing. D told P that it was rather impossible for such situation to happen, but he promised that he would indemnify P for the difference in value if such situation arose. Hence, the Indemnification Agreement.

(l) On about 10 October 2020, P informed D that he would invest in NFC by acquiring 880,000 NFC at 100 ETH on the basis of the arrangement mentioned in para 38(f) above (ie the Agreement) and the Refund Agreement. On the same day, D provided P with his crypto-wallet for P to transfer the 100 ETH to him.

(m) P did not subscribe for NFC from the Issuer. Neither had D told P that the refund would be made by the Issuer in USDT before the commencement of this action. USDT was a cryptocurrency with value pegged to the value of US dollars and was therefore very stable in value (hence it was also known as “stablecoin”). Given its stability, P would not have agreed to a refund in USDT unless it was equivalent to the value of his ETH at the date of refund.

(n) D has not shown P the NFC whitepaper (a document issued by a crypto-issuer to public investors making disclosure of any material fact relating to the crypto-currency to be issued) prepared by the Issuer. Neither has D ever told P that the NFC whitepaper or the refund policy was contained in the Website.

(o) P caused a total of 100 ETH to be transferred to D’s crypto-wallet by two tranches, the 1^st tranche on 11 October 2020 and the 2^nd tranche on 12 October 2020.

(p) On about 24 October 2020, D for the first time sent P a hyperlink to the Website via WhatsApp. D however did not explain to P any of the information contained therein. P tried to browse through the Website but was not aware of the Issuer’s refund policy as alleged by D.

(q) On about 25 October 2020, P met with D in Tuen Mun for a chat about P’s investment portfolio after P suffered a loss at USDT contract market. They talked about P’s NFC investment and D reassured P by reference to the Refund Agreement and the Indemnification Agreement.

(r) In about November 2020, given various bad news about the mis-operation of cryptocurrency platforms, P expressed to D again his concern about the ICO/Listing Risk and the drop in value of the NFC acquired on the date of Listing. In response, D assured P again by reference to the Refund Agreement and that P’s investment would be protected. In particular, D, on 13 November 2020, sent P a WhatsApp message, assuring him that “唔洗怕，之前都話咗會保底退返ETH俾你”.

(s) By the end of November 2020, there was no ICO and Listing. No NFC was issued or listed on any of the centralized crypto-exchange markets.

(t) On 13 January 2021, D informed P that he would like to transfer 44,000 USDT to P since ICO/Listing had failed to complete. D asked for and P provided D his crypto-wallet. 44,000 USDT (equivalent to about 35 ETH on 13 January 2021) was subsequently transferred to P on about the same day. Since then, P has never received any further refund from D.

(u) On 18 January 2021, P sent a message to D, demanding for the balance of the refund. D however ignored P’s demand.

(v) On or about 25 March 2021, P instructed his solicitors to issue a letter to D, formally put on record the termination and rescission of the Agreement.

(w) As to the calculation of compensation under the Refund Agreement, P referred to the annual interest rate from 12 October 2020 to 17 September 2023 under his time deposit account held with JPEX.

(x) In order to save time and costs, P was willing to accept the following interest rates for the following time periods for calculating the amount of compensation under the Refund Agreement as tabulated below:

	Period	Interest Rate (pa)	ETH Gained
(1)	11/10/2020 – 13/01/2021[17] (a total of 95 days)	40%	10.41[18]
(2)	14/01/2021 – 28/03/2022 (a total of 439 days)	35%	27.36[19]
(3)	29/03/2022 – 13/09/2023[20] (a total of 534 days)	21%	19.97[21]
TOTAL:			57.74

(y) ETH is volatile in value. As to the calculation of the value of 65 ETH, the value of 1 ETH as at 23 May 2024 was about US$3,806.09 (equivalent to HK$29,687.50). Hence, the value of 65 ETH would be HK$1,929,688.00 (HK$29,687.50 x 65) as at 23 May 2024. P believed that compensation should be calculated on the basis of the current value of the ETH (if they were to be converted into Hong Kong currency).

Audio Records

39.During P’s examination-in-chief, P has produced a USB disc (the “USB”) [Exhibit-PP1] containing 4 audio clips (the “Audio Clips”) which were originally contained in his smartphone (used by P in October 2020) through the use of WhatsApp as a means of communication between him and D. The transcript of the WhatsApp written messages[22] (the “Transcript”) and the Audio Clips (together with other audio clips recorded by WhatsApp) were first downloaded from his smartphone to his desktop computer at home in about March 2021. He did so according to the advice of his then solicitors. The Audio Clips were later copied to the USB for production as evidence at trial. P testified that the Audio Clips have not been tempered with for production through the USB at trial and the USB was an accurate record of the Audio Clips.

40.P later gave his smartphone to his son for playing electronic games. His son has lost his smartphone. So, he is not able to produce his smartphone to play the relevant audio clips in court.

41.Neither the Audio Clips nor the USB has been disclosed to D in the discovery process. The Court admitted the Audio Clips on de bene esse basis, subject to their admissibility being determined at the conclusion of the trial.

42.Through P’s evidence in chief, P played the Audio Clips in court so that the Court could have a full picture of the WhatsApp communications between P and D, be they verbal or written, on 9 and 10 October 2020. The Audio Clips contained the following voice messages:

(a) 9/10/2020, 11:16:49 pm – from P (the “1^st Audio Clip”);

(b) 10/10/2020, 12:20:57 am – from D (the “2^nd Audio Clip”);

(c) 10/10/2020, 12:59:35 am – from D (the “3^rd Audio Clip”); and

(d) 10/10/2020, 1:11:45 am – from P (the “4^th Audio Clip”).

43.P has helpfully prepared a transcript of the Audio Clips (the “Audio Transcript”) for the Court’s consideration. I have checked the Audio Transcript when P played the Audio Clips in court. The Audio Transcript is an accurate transcript and I have marked the Audio Transcript as Exhibit PP-1(A). Also, when the Audio Clips were being played in court, some screencaps were taken and have been marked as Exhibit PP-1(B).

DISCUSSION

The Admissibility of the USB

44.In P’s Note of Closing Submissions lodged with the Court on 25 March 2026 (“P’s Closing”), Mr Ho submitted that the non-disclosure of the Audio Clips might potentially prejudice D on his right to object to their authenticity. However, as Mr Ho further submitted, the chance that D could successfully dispute the authenticity of the Audio Clips was extremely slim. Mr Ho further advanced his reasons to support the aforesaid submissions.

45.As I have said, P has discovered the Transcript and its authenticity is not challenged[23]. The Transcript provides the context in which the Audio Clips were recorded automatically by the smartphone which formed part and parcel of the Transcript. After listening to the Audio Clips and reading the Transcript in its entirety, I have no doubt that the Audio Clips now recorded in the USB are authentic.

46.The creation dates and times of each of the Audio Clips[24] tally with the relevant omitted voice messages in the Transcript[25]. The content of the Audio Clips fits well with the entire context of conversation (ie written messages) between P and D on 9 and 10 October 2020. The easiest way to confirm the authenticity of the Audio Clips is to produce P’s smartphone and play the Audio Clips from the smartphone. P has explained why he could not produce the smartphone and I accept his explanation.

47.Apart from authenticity, the issue of hearsay arises from the use of USB to record the Audio Clips for production in court. The original evidence is that contained in P’s smartphone. The Audio Clips downloaded into and kept in P’s desktop computer at home, though mechanically by computer, is the first hearsay record of what was recorded in P’s smartphone. The copy of the Audio Clips from P’s desktop computer into the USB is the 2^nd hearsay record of what was recorded in P’s smartphone. I do not accept Mr Ho’s submission that the Audio Clips in the USB are the original from P’s smartphone.

48.After the Civil Justice Reform, hearsay evidence is generally inclusionary unless a party objects to it and the Court is satisfied that the exclusion, having regard to the circumstances of the case, is not prejudicial to the interests of justice.[26] In this case, the USB has never been discovered and was only adduced for the first time on the 1^st day of the trial. I need to look at the USB closely and treat it as if D would have objected to its admission had he been present at the trial. However, as I have said, the USB is authentic and it can be said that exclusion of the USB will be prejudicial to the interests of justice in that its exclusion will take away from the Court’s consideration an important piece of evidence in P’s favour, ie a record of the conversations between P and D on 9 and 10 October 2020 which relates to the time when the Agreement and the Refund Agreement came into existence.

49.Accordingly, I rule that the USB is admissible as evidence for my consideration and Exhibits-PP1, PP1(A) and PP1(B) shall become Exhibits-P1, P1(A) and P1(B) respectively. As to the question of weight to be attached to the content of the Audio Clips, I shall no doubt be guided by the factors set out in section 49 of EO.

Analysis

50.In contradistinction to its Indorsement of Claim, P sought a multitude of reliefs in its Re-Amended Statement of Claim. I have remarked that reliefs not claimed in the Indorsement of Claim cannot now be sought by P at trial. I have also questioned whether, under the doctrine of election estoppel, P could claim the Specific Performance because P had at one point in these proceedings sought rescission of the Agreement. Furthermore, some reliefs sought are alternative to one another.

51.At the close of P’s case, P elected to only pursue the Common Law Damages against D.

52.In light of P’s election as aforesaid, the only material issues which need to be resolved are as follows:

(a) The existence of the Refund Agreement; and

(b) The quantum of damages recoverable by P.

53.P gave his oral evidence clearly and unequivocally. His evidence is supported by contemporaneous documentation and is inherently probable in that:

(a) It is common ground that the 100 ETH was transferred from P to D’s crypto-wallet for the acquisition of NFC. This clearly supports P’s case that the NFC acquisition was a matter between P and D, not that between P and the Issuer. In this case, there is no evidence of any privity between P and the Issuer.

(b) According to D’s case, P was also eligible for “early-bird” subscription. There is no acceptable explanation as to why P needs D’s help to subscribe for NFC (which P was also eligible to subscribe himself). P’s worry about the complication in subscribing for NFC is not a well-founded reason. Furthermore, there is no plausible explanation as to why D would help P subscribe for NFC for nothing in return.

(c) It is P’s evidence that, before 10 October 2020, the 100 ETH were deposited in a time deposit account held with JPEX, earning high interest, and that the value of ETH was on a rising trajectory. The withdrawal and subsequent conversion of ETH into NFC would mean that P would have to take the risk of missing out on both profit-making opportunities. There is clearly sufficient reason (and indeed plausible) for P to come to the Refund Agreement with D before he transferred the 100 ETH to the latter.

(d) P’s case on subscription modes offered by the Issuer is consistent with the undisputed evidence, see D’s WhatsApp message sent on 9 October 2020 (at 3:40:42 pm)[27]. On the other hand, D’s case that he merely helped P make “early-bird” subscription of NFC from the Issuer at 8,800 NFC per ETH is unsupported by any documentary evidence, and in fact contradicted by the aforesaid contemporaneous WhatsApp message sent by him.

(e) P’s case is that according to the Refund Agreement, refund should be made in ETH, but not other type of cryptocurrency. This is consistent with P’s WhatsApp message on 23 October.2020 (7:21:11 pm)[28] and P’s WhatsApp message on 18 January 2021 (9:34:34 pm)[29].

(f) On D’s case, 7,000 USDT (out of the 44,000 USDT refunded) represented the Issuer’s discretionary compensation for “rise in value of ETH”. It is inherently improbable for the Issuer to compensate P (only qua an investor) for the “rise in value of ETH”.

(g) P made his demand for the outstanding 65 ETH on 18 January 2021[30], only 5 days after the refund of 44,000 USDT by D. The aforesaid demand is very contemporaneous and was made at a time when litigation between P and D was not even on the horizon.

54.All in all, I accept P as a credible and reliable witness. I reject D’s case, accept P’s case and find P’s case proven against D. In particular, I find that P and D has entered into the Refund Agreement and that D has acted in breach of the Refund Agreement by not returning the 100 ETH and compensating P for his loss of interest arising from the 100 ETH.

55.As to quantum of damages to be awarded to P, cryptocurrency is a form of “property”[31] and the Court is required to determine the value of the 65 ETH.

56.It is trite that the general principle for the assessment of damages is compensatory, ie that the innocent party is to be placed, so far as money can do, in the same position as if the contract had been performed. The principle normally leads to assessment of damages as at the date of breach. But this is not an absolute rule: if to follow it would give rise to injustice, the court has power to fix such other date as may be appropriate in the circumstances.[32]

57.Given that P’s 100 ETH has been passed to D’s possession, there is no reason why D should not have returned P’s 100 ETH after 31 November 2020 and why D should not have returned the 65 ETH to P after D made a refund of 44,000 USDT (equivalent to about 35 ETH on 13 January 2021) to P on 13 January 2021. I accept Mr Ho’s submission that P should be entitled to recover for increase in market price between the breach and the judgment[33].

58.According to Mr Ho, the valuation obtained from CoinMarketCap on 26 March 2026 (at 10:35am) shows that the market value of 1 ETH on 26 March 2026 was US$2,154.48. The value of 65 ETH on 26 March.2026 is US$140,041.20 (65 ETH x US$2,154.48).

59.According to P, the 100 ETH were deposited in his time deposit account held at JPEX, yielding a high daily interest before they were transferred to D for NFC subscription. This is consistent with the 4^th Audio Clip, ie a contemporaneous voice message sent by P on 10 October 2020 (1:11:45 am) [34].

60.It is abundantly clear that if the 65 ETH was not returned to P upon demand according to the Refund Agreement, P would have suffered interest loss by reference to the high daily time-deposit interest rate at JPEX. Such loss was within the contemplation of the parties at the time when the Refund Agreement was entered into.

61.Mr Ho agreed in his oral closing that the date of breach of the Refund Agreement is 1 December 2020. Therefore, such interest loss started to accrue from 1 December 2020 when Listing could not be completed and the 100 ETH should have been returned to P. The calculation is as follows:

	Period	ETH Principal	Interest Rate	ETH Gained
(1)	1/12/2020 – 13/1/2021 (a total of 44 days)	100	40% (pa)	4.82
(2)	14/1/2021 – 28/3/2022 (a total of 439 days)	65	35% (pa)	27.36
(3)	29/3/2022 – 13/9/2023 (a total of 534 days)	65	21% (pa)	19.97
TOTAL:				52.15 =====

62.Adopting the value of ETH as of 26 March 2026, the value of the 52.15 ETH as of 26 March 2026 would be US$112,356.13 (52.15 ETH x US$2,154.48).

DISPOSITION

63.D is liable to pay P the sum of US$252,397.33 (140,041.20 + 112,356.13).

64.Accordingly, I make the following Order:

(a) Judgment be entered for P against D on his claim for common law damages assessed at US$252,397.33 with interest at 1% above the HSBC best lending rate on USD from 14 September 2023 to the date of judgment and thereafter at the judgment rate; and

(b) the Counterclaim be dismissed.

65.As to costs, I make the following order nisi:

(a) D do pay P’s costs of the action on a party and party basis, such costs to be taxed if not agreed with certificate for counsel; and

(b) D do pay P’s costs of the counterclaim on a party and party basis, such costs to be taxed if not agreed with certificate for counsel.

66.The costs order nisi shall be made absolute unless application for variation is made within 14 days from the date of this judgment, and insofar as D is concerned, from the date of service of this judgment.

67.Lastly, it remains for me to thank Mr Ho for his able assistance.

Mr Matthew Ho, instructed by Chris Yiu & Co., assigned by the Director of Legal Aid, for the Plaintiff

The Defendant was not represented and did not appear