Singapore's first bitcoin dispute goes to court

Rage Review : In view of the complexity of cryptocurrency, the Singapore International Commercial Court (SICC) refused to make a summary judgment on the Bitcoin dispute between B2C2 and Quoine and requested a trial. This case is the first dispute in the cryptocurrency field in Singapore. The main reason why it is difficult to resolve is that many cryptocurrency behaviors lack clear legal definitions and supervision. Therefore, the new problems brought about by this emerging thing are a challenge for legislatures in Singapore and even around the world.

Translation: Ina

Singapore’s first Bitcoin dispute

According to The Straits Times, “electronic market maker B2C2 sued bitcoin exchange operator Quoine in July, claiming its trades were reversed and its earnings were deducted.”

London-based B2C2 claims that “financial institutions and large traders trust B2C2 to enable seamless cryptocurrency trading through plug-and-play connectivity, shorting, and post-trade settlement.” Quoine, which has offices in Singapore, Japan, and Vietnam, calls itself a “leading fintech company providing trade, exchange, and next-generation financial services powered by blockchain technology.”

The subject of the dispute reportedly revolved around B2C2’s attempt to “reclaim 3,084.78582325 bitcoins from Quoine, alleging that Quoine’s breach of trust deprived it of the opportunity to sell the proceeds at the highest midpoint price.”

B2C2's bitcoin earnings at the time were close to $4 million, but due to the surge in prices, they have now increased nearly tenfold. Given the complexity of cryptocurrencies, Judge Simon Thorley of the Singapore International Commercial Court (SICC) refused to grant summary judgment and instead requested a trial to determine "whether B2C2 is entitled to recover the bitcoins on its own or the value of the bitcoins that have increased since the incident." This case is the first of its kind in Singapore.

The SICC said its role was to "facilitate the arbitration, not conduct it, and in the hope of providing an alternative to the two companies".

Are filled orders irrevocable?

The heart of the issue may lie in the regulatory status of cryptocurrencies. Quoine has been accused of violating its own standards for transaction irreversibility. In this case, there may not be an appropriate arbitrator, and more government regulation may ultimately be needed.

Danny Ong of B2C2 said his client "placed an order on Quoine's platform to sell ether at a price of 10 bitcoins for 1 ether." These orders turned into a series of transactions, and finally B2C2 paid 309.2518 ethers to buy 3092.517116 bitcoins. The bitcoins were credited to B2C2's account that day. But the next day, Quoine directly reversed the transaction without permission.

Quoine took this action out of fear that "fair global market prices" would be greatly disrupted, but there is no legal standard to determine whether such behavior meets these concepts.

B2C2 reportedly asked for "the U.S. dollar proceeds of the highest mid-price of Bitcoin between the date of default and the date of judgment."

According to attorney Paul Ong, Quoine claimed that this was a “technical glitch” that B2C2 was exploiting to gain unfair advantage. He noted that the price was “more than 100 times higher than the actual market price of ether/bitcoin” and therefore, “this is a very serious matter that must be resolved at trial.”