Shock Court Ruling Holds Crypto Exchange Liable in Singapore’s First Bitcoin Trial
A court has ordered the unhappy operator of crypto exchange Quoine to follow through with a glitched computer transaction that allowed a crypto market liquidity provider to swap ether for bitcoin at a rate of 10 bitcoin to every ether at a time when 1 ETH was worth .036 BTC, not 10.
In the Republic of Singapore’s first trial regarding bitcoin, the Singapore International Commercial Court (SICC) issued a judgment Thursday to press Singaporean crypto exchange Quoine to execute a trade its computers allowed in error.
A Crypto Exchange Error
The computer error, which occurred on Singaporean crypto exchange Quoine on April 19, 2017, allowed crypto liquidity provider B2C2 to sell 309.2518 ether (worth $46 USD / 1 ETH at the time) for 3,092.517116 bitcoin (worth $1,267 / BTC).
So B2C2 was able to execute a trade of ether for bitcoin at a rate of 10 bitcoin for one 1 ether. It’s a wonder why they executed 309 such trades and not a million.
The total market value of the ether B2C2 swapped for bitcoin over Quoine that day was about $14K dollars, and the total market value of the bitcoin they got back for it was about $3.9M dollars. So quite understandably the transactions were reversed.
A Dubious Lawsuit
But rather than accept that this was an obvious computer error, B2C2 sunk their claws into Quoine and took the hapless crypto exchange to court.
Their litigation of the disputed April 19, 2017 cryptocurrency trade has been very aggressive. After B2C2’s legal team filed the case with the SICC, it motioned for an immediate summary judgment after each side had made its arguments.
After the judge dismissed the motion for summary judgment in December 2017, the case proceeded to trial and deliberation.
A Shocking Decision
Outstandingly, the court ruled Thursday that the trades were indeed wrongfully reversed by Quoine, finding in favor of B2C2’s argument that the crypto exchange operator “acted fraudulently” because their agreement states that an order is “irreversible” once completed.
Quoine contends that B2C2 is “being opportunistic and seeking to profit from a technical glitch,” which would certainly appear to be the case whether that argument has any legal merit or not in the Singaporean court’s view.
The court will not require Quoine to turn over all 3,000+ bitcoin to B2C2, given that today’s much higher price would put the total value of the disputed bitcoin above $11.8 million and impose a substantial hardship on the crypto exchange company.
Today’s deflation-adjusted amount of disputed bitcoin would be a little over 1,000 BTC. The court has not specified the amount of damages to be paid and has ordered the parties to settle on an amount.