Singapore’s first bitcoin court trial starts yesterday. The court intends to decide whether some fulfilled trades were wrongfully reversed by a cryptocurrency exchange on April 2017. This alleged reversal is said to have led to a reduction in proceeds without authorization.
According to Singapore’s Straits Times, the court case, heard in Singapore International Commercial Court, has electronic market maker and liquidity provider B2C2 suing cryptocurrency exchange operator Quoine over a “unilateral reversal.”
B2C2 claims that the reversal action taken by the exchange violated the agreement terms of the two companies. And it is now seeking to recover some 3,085 bitcoins from Quoine. That translates to roughly $13 million now.
Straits Times, a news site based in Singapore, said the B2C2’s legal team claimed in its opening statement that Quoine abused its role as the operator of the platform. It added that the crypto exchange had acted in “breach of trust” as B2C2’s custodian. It alleges that “Quoine chose the most advantageous course” to deal with financial losses arising from the trade risk on its platform.
The exchange claims a programming glitch before the trades hindered its access to accurate market price data on the cryptocurrencies in question – bitcoin and Ethereum. It argues that the platform stopped creating or placing new orders due to the glitch, which affected the orders of B2C2.
It also claims B2C2 made orders that were significantly higher than average, which is illegal according to their terms. Quoine points to a risk disclosure statement giving the right to cancel transactions that took effect on an aberrant value. However, B2C2 continues to maintain they had nothing in their terms with Quoine. Basically which could allow them to carry out such a maneuver.
The court had the B2C2 founder, Maxime Boonen, on the stand at the hearing. He answered questions related to the market maker’s responsibility in keeping prices orderly on Quoine’s exchange. However, Mr. Boonen says he has no influence over prices, and could not decide what they should be.
However, Quoine CTO Antonio Gomez Lozada expects to take the stand next week. This case, heard in Singapore’s high court, could set a precedence for crypto-related cases in the future.