A recent legal case in Singapore highlights the jurisdictional problems when issuing international loans and securities. Although the case did not involve tokens, as debt and security blockchain tokenization expand, so might the choices for the relevant country to pursue a dispute.
The case involved an Indonesian company issuing senior secured loan notes on the Singapore Stock Exchange (SGX) with New York as the contractual jurisdiction. The question arose whether the foreign company had the legal standing in Singapore to apply for moratorium protection, an authorization to postpone debt repayments. The High Court found that having the Notes listed on SGX was enough to establish a substantial connection, therefore authorizing the foreign company to apply for the moratorium.
If the loan notes were tokenized, the situation could be even more complex. That’s because tokens might have multiple listing venues and if the token isn’t native, there’s both the jurisdiction of the token and the underlying asset it represents.
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