Can we rely on the White Paper?

Virgilio Tarrago da Silveira v Hashstacs Pte Ltd : Identifying representations/misrepresentations and opinions in a token whitepaper

Virgilio Tarrago da Silveira and Munchetty Investments Ltd v Hashstacs Pte Ltd and Soh Kai Jun ([2025] SGCA(I) 3) represents an illuminating ruling at the intersection of emerging blockchain technology and established principles of tort law, particularly the tort of deceit. This case addresses critical issues concerning the legal characterization of representations made in the context of crypto-assets, the identity of the representor in complex corporate structures, and the applicability of misrepresentation claims to statements of future intent or vision in technology projects.

Background

Blockchain and Utility Tokens

The dispute arose from the issuance and marketing of STACS Tokens, utility tokens designed to power the STACS Protocol ecosystem (a hybrid public/permissioned blockchain infrastructure intended to facilitate the issuance, trading, clearing, and settlement of digital securities). The tokens were initially issued as Rock Tokens by GSX in 2018 and later replaced by STACS Tokens.

The appellants, including Mr Virgilio Tarrago da Silveira, acquired millions of these tokens based on representations made in a whitepaper (the “Third Whitepaper”) and on the STACS website. These representations outlined the project’s ambitions, commercial objectives, and mechanisms such as the distribution of transaction fees generated on the STACS Protocol.

Whitepapers and Website Representations

Whitepapers in the blockchain space serve as marketing and technical documents that describe a project’s vision, technology, and roadmap. They often contain statements about future plans and intended functionalities, which investors rely upon when deciding to purchase tokens.

In this case, the Third Whitepaper and website materials were scrutinized to determine whether they contained actionable misrepresentations of fact that could give rise to tortious liability.[i]

Tort Law Context: Misrepresentation and Deceit

Elements of the Tort of Deceit

The Court reaffirmed the established elements of the tort of deceit, as set out in Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435, which require:

1. A representation of fact made by words or conduct;
2. The representation must be made with the intention that it be acted upon by the plaintiff or a class of persons including the plaintiff;
3. The representation must be false and the plaintiff must have acted upon the falsity;
4. It must be proved that the plaintiff suffered damage by so doing; and
5. The representation must be made with knowledge that it is false; it must be willfully false, or at least made in the absence of any genuine belief that it is true.

Key Legal Issues

Identity of the Representor

A central issue was whether Hashstacs Pte Ltd (Singapore) (“Hashstacs (SG)”) was the representor of the statements in the Third Whitepaper and on the website. The appellants argued that Hashstacs (SG)’s involvement in drafting, editing, and uploading the whitepaper and website content rendered it liable.

The Court rejected this, finding that:

• The Third Whitepaper was published by Hashstacs (BVI), a separate entity, on the instructions of GSX.
• Hashstacs (SG)’s role was limited to assisting with edits and uploading content but did not amount to making or adopting the representations.
• The whitepaper was authored in the voice of GSX, which controlled the STACS Protocol and was capable of fulfilling the representations.
• The website was controlled by Hashstacs (BVI), not Hashstacs (SG).
• No sufficient evidence was adduced to prove that Hashstacs (SG) made or adopted the website representations.

This finding underscores the importance of clearly identifying the legal entity responsible for representations in complex corporate and technological arrangements.

Representations of Fact vs. Statements of Future Intent

A pivotal legal question was whether certain statements on the website constituted representations of present or past fact, or merely statements of future intention or vision. The distinction is crucial because only false representations of fact can ground a misrepresentation claim.

The Court emphasized that statements reflecting a representor’s vision or plans for the future have a similar footing as a statement of opinion and do not constitute actionable misrepresentations of fact. This aligns with established legal principles that protect forward-looking statements unless they are accompanied by a false statement of present fact or intention.

The Court held that many of the statements from the website were prospective, describing future plans and ambitions rather than present facts.

Where representations extended to statements about future actions or promises, the Court repeated the Court of Appeal ruling in Tan Chin Seng v Raffles Town Club Pte Ltd [2003] 3 SLR(R) 307 that “future promises … could only be enforced in the event of a valid contract”.

Conclusion

This case clarifies that in multi-entity technology ventures, liability for misrepresentations depends critically on which entity made or adopted the statements. Mere involvement in drafting or uploading materials does not automatically confer representor status or liability.

This is particularly relevant in blockchain and crypto projects, where multiple entities may be involved in development, marketing, and administration, often across jurisdictions.

This case also reinforces the legal principle that statements of future plans or visions, common in technology whitepapers and websites, are generally not actionable as misrepresentations of fact unless accompanied by false present facts or fraudulent intent.

This provides some legal certainty for technology companies and investors, recognizing the inherent uncertainties in innovative projects.

For technology companies, investors, and legal practitioners, this case underscores the necessity of identifying clear corporate structuring, precise communication, and careful legal analysis when dealing with representations in emerging technology projects. It also serves as a cautionary tale for investors relying on forward-looking statements in the volatile and rapidly evolving crypto landscape.

[i] The representations were:

1. The entire STACS Protocol Ecosystem will be powered by the STACS Token (the “first representation”).
2. Verified Parties [sic, the Third Whitepaper uses “Verified Partners”] (i.e. VPs) on the STACS Protocol would need to stake the STACS Token (the “second representation”).
3. Transaction Fees on Global STACS are based on the Gas Price Concept (i.e. payments for transaction fees would be made on-chain, using the STACS Token, intended to be used as the sole embedded common medium of exchange for the settlement of all transactions among all its user [sic], ie on the STACS Ecosystem) (the “third representation”).
4. Transactions on the STACS Protocol Ecosystem (including on any Native STACS, the private blockchain subsection on the STACS Protocol) can be paid directly on chain using the STACS Token, or alternatively be invoiced and paid using the STACS Dollar (a stablecoin pegged to Fiat USD), which Hashstacs would convert via an open market purchase into STACS Tokens (the “fourth representation”).
5. 80% of all Transaction Fees from the STACS Protocol will be used to purchase STACS Token from the open market (i.e. via exchanges such as GBX, which operates itself on the same common integrated STACS infrastructure), which would subsequently be distributed to certain nodes within the STACS Ecosystem and/or retained in an ‘Investor Protection and Governance Fund’ (the “fifth representation”).

The plaintiff pleaded that the representations had the following meanings:

1. “STACS Token is the utility token of the STACS Protocol Ecosystem (as well as the GSX Group)”
2. “Transaction fees will be charged for all transactions using the STACS Protocol”.
3. “70% of all transaction fees will be used to purchase STACS Tokens from the open market and shared with Global Nodes and Supernodes as reward”.
4. “10% will be used to purchase STACS Tokens from the open market and retained in an Investor Protection Governance Fund”.