The Singapore International Commercial Court has charged cryptocurrency exchange Quoine with “breach of contract and breach of trust” in a case filed by crypto market maker B2C2 after incorrectly reversing a total of 3,092 Bitcoin trades made two years ago.
As detailed in the court’s case summary published Thursday, the exchange’s reversal of B2C2’s previous trades constitutes an infringement of contract, and as such, the court has ordered Quoine to settle over $11.5 million in Bitcoin to B2C2.
The case stemmed from seven trades made by B2C2 back in April 2017 in which the crypto market maker sold Ether at an “abnormal” exchange rate of 10 Bitcoin, which was then over 250 times higher than the market rate pegging 1 Ether to roughly 0.04 Bitcoin.
According to court documents, Quoine subsequently credited the trade proceeds to B2C2’s account while the equivalent amount of 309 Ether was deducted. However, a day following the transaction, Quoine canceled all the trades and reverted the balances to their pre-trade status, prompting B2C2 to file a lawsuit against Quoine in an attempt to reclaim nearly $12 million worth of Bitcoin from the exchange.
As B2C2 stated in August 2017, Quoine “had no contractual right unilaterally to cancel the trades once the orders had been effected.”
While the court’s verdict favored B2C2, it did overrule its request to order Quoine to transfer 3,092 Bitcoin to the crypto market maker’s account, as the digital asset’s price is now “substantially higher” compared to its previous value in 2017. At the time the trades were executed, Bitcoin was only pegged at roughly $1,300, just a little over a third of its current price.
As the court stated:
“Instead, the plaintiff’s [B2C2] remedy lay only in damages which, if not agreed, will be assessed at a subsequent hearing.”
The lawsuit marks Singapore’s first crypto-related case.
Following the court’s verdict, Quoine CEO Mike Kayamori released an official statement on Thursday, indicating that:
“We are reviewing the judgment and considering our options, including the possibility of an appeal.”