The Singapore International Commercial Court has ruled against cryptocurrency exchange Quoine after it reversed trades for a total of 3,092 bitcoins (BTC) by crypto market maker B2C2 two years ago.
The court published a case summary Thursday, stating that it found Quoine liable for the “breach of contract and breach of trust” in reversing B2C2’s trades made at an “abnormal” exchange rate back in April 2017.
B2C2 had made seven trades in which it sold ether (ETH) at an exchange rate of 10 BTC per token – approximately 250 times higher than the market rate of about 0.04 BTC to 1 ETH at the time, according to the court document.
The proceeds of the trades were then automatically credited to B2C2’s account by Quoine, and the corresponding amount of 309 ETH was debited. But, a day later, when Quoine discovered the abnormality, it canceled the seven trades and reset the balances to their pre-trades state.
In August 2017, B2C2 sued Quoine, aiming to recover the 3,092 BTC (worth almost $12 million at press time) from the exchange.
B2C2 at the time said that Quoine “had no contractual right unilaterally to cancel the trades once the orders had been effected.”
While the court has sided with B2C2 in its ruling, it declined to order Quoine to transfer 3,092 BTC back to B2C2, given that the price is “substantially higher” than the price in April 2017 when the trades were executed. Back then, a bitcoin was worth around $1,300, while today the price is around $3,850.
“Instead, the plaintiff’s [B2C2] remedy lay only in damages which, if not agreed, will be assessed at a subsequent hearing,” the court said.
This is one of the court’s first judgments involving cryptocurrencies, in which it found that cryptocurrencies have the “hallmark characteristics of property.”
In response to the ruling, Quoine issued a statement on Thursday, stating that it was disappointed with the judgement.
Quoine CEO Mike Kayamori said:
“We are reviewing the judgment and considering our options, including the possibility of an appeal.”