The Straits Times reports that Singapore’s Court of Appeals has ruled against digital currency exchange Quoine in a historical case relating to a breach of contract. It is the first court ruling in the country involving a cryptocurrency dispute. The ruling puts an end to a legal battle that began almost three years ago.
Quoine, the parent company of the Japanese cryptocurrency trading platform Liquid, is now facing settlement proceedings after the Court of Appeal rejected its claim that it had the right to cancel limit orders placed by B2C2 trading software on the exchange based on the fact that those transactions were simply a “mistake.”
Quoine had argued the parties who engaged in that trade were acting under the false pretense the trades were carried out at the fair market price, however, B2C2 knew the trading pairs were incorrectly priced.
Back in April 2017, B2C2 had placed seven trades and sold Ethereum (ETH) at an exchange rate of 10 Bitcoins BTC each, approximately 250 times higher than the market rate of about 0.04 BTC to 1 ETH at the time, according to documents presented to the court.
A day after the trades took place, where 309 ETH were exchanged for 3,092 BTC ($12 million at the time), Quoine noticed the abnormality and reset B2C2’s balances to their state before the seven trades, which prompted the lawsuit.
The appeal court’s reasoning focused on the question of how the legal interpretation of “mistake” should be understood when contracts were executed by computer systems with very limited human involvement.
The Singapore International Commercial Court ruled in March 2019 that Quoine was liable for the “breach of contract and breach of trust” in reversing B2C2’s trades. Subsequently, the exchange filed for an appeal, however, four of the five judges presiding on the appeal board dismissed Quione’s argument and thus appeal failed.
The court said there were no mistakes in the terms of the trading contract. B2C2’s trading software was not aware of any when executing the orders, according to the court ruling.
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