Over $36 Million Worth of Bitcoin at Stake in Singapore's First Ever Crypto Trial

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.

Also read: “Only After Regulation Will Banks Work With You” – Japanese Exchange Operator Kayamori on Singapore Expansion

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.”

What are your thoughts on Singapore’s first major crypto trial? Tell us in the comments below.

Images via Pixabay, SICC, Quoine.

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