25 February, 2020 | AtoZ Markets – In the country’s first legal dispute concerning the cryptocurrency, the Singapore Court of Appeal decided that crypto exchange Quoine must pay damages to the B2C2 electronic market maker. The losses relate to seven trades that were wrongly reversed on the platform during April 2017.
Court Rejects Quoine’s Appeal over Crypto Dispute
According to The Straits Times, Quoine crypto case is the first such case in the country involving a cryptocurrency dispute. The legal action began almost three years ago.
Quoine is the parent company of the Japanese trading platform Liquid. It is now facing settlement after the court dismissed its appeal. Its appeal was that it had the right to cancel orders placed by B2C2 on its platform based on the fact that these transactions were a” mistake “.
However, Quoine had argued that the parties who interacted with the B2C2 trading software were operating under the false pretext. The trades were at fair market value and that B2C2 knew that the trades mispriced.
B2C2 had placed seven trades in which it sold ETH at an exchange rate of 10 BTC each in April 2017. It was about 250 times more than the market rate of about 0.04 BTC for 1 ETH at the time, according to court documents.
The court found that both Quoine and B2C2 were operating complex automated trading systems to execute a high-volume trade on the Quoine exchange. However, it discovered that these systems sought to exploit the spread between the prices of cryptocurrencies on several exchanges.
B2C2 arbitrage robot returned to a “high price” of 10 BTC per ETH due to a lack of sufficient market data. In April 2017, a bug in Quoine’s software caused the high price of B2C2 to take effect. It was before seven orders were executed on April 19, 2017. It allowed B2C2 to sell around 309 ETH for 3,092 BTC. Shortly after that, Quoine deducted 3,085 BTC from the B2C2 account.
Read More: BOE Supports Central Bank Digital Currency
Breach of contract and Breach of Trust
Quoine was responsible for “breach of contract and breach of trust” by canceling B2C2 trades. The Singapore International Commercial Court ruled it in March 2019. The exchange subsequently appealed.
However, four of the five judges presiding over the appeal panel rejected Quione’s argument. They said that it is the programmer’s knowledge that is the digital agreement between a computer system and a participant on the platform.
The court declared that there was no error in terms of the trading contract. Even if there was an error, the B2C2 trading software was not aware of it at the time of the execution, according to the report.
Quoine Mandated to Pay Damages to B2C2
SICC decided that Quoine should pay damages to B2C2 almost 12 months ago. The parties could not reach a consensus on the repaid amount.
The SICC did not rule that Quoine should return 3,085 BTC to the market maker, said Judge Simon Thorley. He also added that current Bitcoin prices were substantially higher than the price in April 2017.
Besides, B2C2 had sold almost a third of the BTC in question before the trades reversed, with trading robots offloading the coins on nine different exchanges.
Think we missed something? Let us know in the comment section below.