The Singapore court of appeal ruled against the Quoine cryptocurrency exchange in a case involving non-performance of a contract and the illegal cancellation of seven transactions.
The Straits Times reports that this case was the first of its kind in the country’s history for trade cases involving cryptocurrencies, and the court’s decision ends a lawsuit that began almost three years ago. The court rejected an appeal by Quoine, the parent company of the Japanese trading platform Liquid. The cryptocurrency exchange claimed that it has the right to cancel orders placed by the b2c2 marketmaker on the platform, based on the fact that these transactions were “erroneous”.
Quoine alleged that parties who interacted with B2C2’s trading software had fraudulently executed transactions at an “abnormal” exchange rate, and that B2C2 was aware of the nature of these transactions. The court of appeal examined how the legal doctrine of “error” should be applied when contracts are drawn up and executed by computer systems with limited human participation.
According to court documents, in April 2017, B2C2 made seven transactions in which it sold ether at the exchange rate of 10 BTC per token – about 250 times higher than the market rate at the time, which was 0.04 BTC per 1 ETH. The day after 309 ETH was exchanged for 3092 BTC ($12 million at the exchange rate at the time), Quoine noticed a deviation from the norm and returned THE b2c2 balance to the pre-transaction state, which caused the lawsuit.
The Singapore international court of commercial Affairs ruled in March 2019 that Quoine was liable for “breach of contract and failure of the Trustee to comply with its duties” when canceling B2C2 transactions. Subsequently, the exchange filed an appeal.
However, four of the five appeal panel judges rejected Quoine’s complaint, saying that information at the software level is important in the context of digital agreements between a computer system and a platform participant. The court ruled that there were no errors in the terms of the trading contract, and even if there was an error, the B2C2 trading software did not know about it to take advantage of the offers for its own purposes, the report said.