The Quoine digital currency exchange platform has been found guilty of reversing several cryptocurrency trades in Singapore’s first Bitcoin-related trial, reports the Business Times.
In the country’s first legal dispute regarding Bitcoin, the Singapore International Commercial Court (SICC) ruled that Quoine is liable for a breach in both contract and trust for unilaterally reversing orders made by B2C2 at an abnormal exchange rate.
B2C2 is an electronic market maker which provides liquidity on exchange platforms. It buys and sells at the prices it quotes for crypto pairings, which ultimately provides trading revenue.
On April 19th 2017, B2C2 placed seven orders to sell Ethereum at a rate of one Ethereum for 10 Bitcoin. Reportedly, the trades were reversed the following day.
B2C2 is now seeking to recover roughly 3,085 Bitcoins from Quoine in the trial. B2C2 has alleged that Quoine abused its role as an operator of the platform and as a custodian for B2C2.
Reportedly, Quoine encountered a glitch in its system. The glitch made it unable to access external market price data for Bitcoin and Ethereum.
As a result, the program stopped creating new orders involving the two cryptocurrencies, which caused an issue with liquidity and by default issues for B2C2.
The SICC will not order Quoine to transfer the Bitcoins back to B2C2 at today’s market price – which is notably higher than it was in April 2017 – stating that doing so would result in hardship for Quoine.
Instead, Quoine has been ordered to reimburse B2C2 with an amount to be agreed upon by the two parties. If an agreement is not reached, then the court will determine the amount in a subsequent hearing.
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