BY CNA team - November 22, 2018
Singapore court to hear first ever crypto suit
In a first for the island-state, Singapore’s court for international commercial disputes will be hearing a suit brought by a crypto liquidity provider against a crypto exchange.
The Straits Times says in a Nov 21 report that this is the first court case involving bitcoin and is over the alleged reversal of transactions in April 2017.
London-based market maker B2C2 is suing Tokyo-based exchange Quoine, alleging that the exchange reversed seven bitcoin-to-ethereum trades that it attempted to perform in April last year.
Quoine contends that the reversal was due to a technical glitch involving 3,085 bitcoins that B2C2 wants to get back from the exchange.
While no value was attached to the suit, the total value of the bitcoins in question, taking the aggregate price from CoinMarketCap as at press time, would be just over US$14mil.
B2C2 is saying that the decision to reverse the trades was made without the market maker’s permission or knowledge and according to court documents, puts it at serious risk of financial loss.
“Quoine chose the most advantageous course to mitigate such risk – by simply reversing the ‘irreversible’ trades and deducting the bitcoin proceeds from the account,” it adds.
The exchange argued that the disruption of supply that led to the trades caused it to “not have access to external market price data” for bitcoins and ethereum.
The disruption made the programme stop creating or placing new orders for these two currencies on the trading platform, resulting in liquidity problems and the consequent B2C2 order problems.
Furthermore, Quoine contends that the nature of the trades were unusual and that as a result of the liquidity problems, B2C2 was able to set up trades at an exchange rate of 10 bitcoins to one ethereum.
“There is no other way than to describe these orders as abnormally and absurdly priced orders, given that they were about 250 times higher than the average price at which (the two currencies) then traded on the platform,” Quoine says.