Bitcoin Dispute Dismissed By Singapore International Commercial Court

Crime, Investing, News | December 29, 2017 By:

Singapore’s first cryptocurrency-related legal dispute has been dismissed by the Singapore International Commercial Court (SICC). The legal dispute is between UK-based cryptocurrency liquidity provider B2C2 and Tokyo-based cryptocurrency exchange operator Quoine.

B2C2 sued Quoine in July of this year for allegedly wrongfully reversing transactions. B2C2 said that on April 19 it paid 309.2518 ethers for 3092.517116 bitcoins, which was credited to its account. However, the following day, Quoine reverse the trades and allegedly misappropriated the proceeds without authorization.

Quoine, on the other hand, cited a “technical glitch” as the reason behind the “abnormal rate.” Quoine said that B2C2 is “being opportunistic and seeking to profit from a technical glitch,” adding that a sophisticated investor like B2C2 with experience trading digital currencies should have suspected the abnormal rate to be a mistake.

In a summary judgment hearing earlier this month, B2C2 attempted to reclaim the bitcoins from Quoine. But SICC International Judge Simon Thorley declined to grant summary judgment. The transaction was originally paid in the amount of $3.78 million worth of bitcoin. Since the payment, however, the price of bitcoin has swollen past $15,000, bringing the value of the proceeds to over $46 million.

On December 28, Judge Thorley dismissed an application by B2C2 for a summary judgement against Quoine. The judge said that Quoine had convinced the court that there were two arguable defenses. Namely, a term displayed on the defendant’s website was incorporated into the parties’ agreement giving the defendant the right to reverse the trades, and the trades were void because of a unilateral mistake at common law.

“The doctrine of unilateral mistake is well developed in circumstances where the error is a human error and the knowledge or lack of it is directly ascertainable from the humans involved,” said Thorley. “Where computers are concerned, the law is less well-developed. When can the workings of a computer or computer program constitute actual knowledge on the part of the programmer or operator of the computer?”

Judge Thorley added that the plaintiff must have known that the price was wholly out of line with all the other prices it had been seeking to trade at during that day (all of which were more than 250 times lower).

“As for actual knowledge on the part of the plaintiff, the defendant submitted that however the abnormally high limit order price came to be offered, it could not have represented a genuine offer to sell in a realistic market,” the judge said.