Singapore International Commercial Court (SICC)
has refused summary judgement, sending
litigants B2C2 and Quoine to trial in order to
sort out the gory details involving $36 million
(at press time) of bitcoin. It’s a case bound to
be watched around the world, as cryptocurrency
begins to enter mainstream business life and
establish legal precedence.
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A First for Singapore
The Straits Times’ Grace Leong reports
“Electronic market maker B2C2 sued bitcoin
exchange operator Quoine in July over trades
that were allegedly wrongfully reversed, which
resulted in the proceeds being deducted.”
B2C2 , a London-based company, claims
“Financial institutions and large volume traders
trust B2C2 for seamless cryptocurrency trading,
with plug-and-play connectivity, short selling, and
post-trade settlement.” Quoine , which has
bureaus in Singapore, Japan, and Vietnam, bills
itself as “a leading fintech company that
provides trading, exchange, and next generation
financial services powered by blockchain
technology.”
The two reportedly are battling over B2C2’s
attempt “to recover 3,084.78582325 bitcoins
from Quoine, alleging Quoine’s breach of trust
‘deprived it of the opportunity to sell the
proceeds on the date of their highest
intermediate value,'” Ms. Leong details.
Proceeds were near $4 million in bitcoin at the
time, but thanks to the price skyrocketing, stakes
are approaching ten-fold higher. No doubt
sensing the complexity of cryptocurrencies,
Judge Simon Thorley refused to pass judgement,
and instead kicked the case to determine
“whether B2C2, if it prevails, is entitled to
recover the bitcoins itself, or the value of the
bitcoins taking into account any increase in value
since the alleged breach,” The Straits Times
reported. The case is a first for Singapore.
The SICC “serves as a companion rather than a
competitor to arbitration as it seeks to provide
parties in transnational business with one more
option,” the Singaporean government agency
asserts.
Are Filled Orders Irreversible?
The heart of the issue might be the current state
of regulations when it comes to crypto. Quoine is
accused of setting its own standard of trade
irreversibility, and yet violating it. In such cases,
there appears to be no final arbiter, which can
ultimately be a call for more government
regulation.
Danny Ong, representing B2C2, is paraphrased as
saying his client “placed orders on Quoine’s
platform to sell ethereum – another
cryptocurrency – for bitcoins at the price of 10
bitcoins for one ethereum,” according to Ms.
Leong. “The orders were filled in a series of
trades […] resulting in B2C2 paying 309.2518
ethereum for 3,092.517116 bitcoins. The bitcoins
were credited into B2C2’s account that day. But
the next day, the trades were reversed by
Quoine,” without permission.
Quoine evidently acted out of huge mark-up fear
over what it terms “fair global market price,” but
there isn’t really a legal standard yet to
determine if this action is in line with notions of
‘huge’ and ‘fair.’
B2C2 is asking for “the highest intermediate
value of the proceeds in US dollars between the
date of the breach and the date of the
judgment,” Ms. Leong notes.
For its part, Quoine explains such was a
“technical glitch,” and that B2C2 is exploiting it
for unfair gain, according to attorney Paul Ong.
He said the difference was “more than 100 times
higher than the actual market price of ethereum/
bitcoin,” and as such, “is a highly material
question which cannot be determined without a
trial.”