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Singapore sees first lawsuit over bitcoin

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  • Queen of sgForums
    驚世駭俗醜不啦嘰 moderatress
    FireIce's Avatar
    264,263 posts since Dec '99
    • Singapore's first legal dispute involving the cryptocurrency bitcoin has erupted over trade proceeds worth around US$3.78 million (S$5.15 million).

      An electronic market maker is suing Quoine, one of the world's major bitcoin exchange operators, over trades that were allegedly wrongfully reversed, which resulted in proceeds being deducted.

      The market maker, B2C2, said it placed orders on Quoine's platform to sell ethereum - another cryptocurrency - for bitcoin at the price of 10 bitcoin for one ethereum.

      The orders were filled in a series of trades on April 19, resulting in B2C2 paying 309.2518 ethereum for 3092.517116 bitcoin.

      The bitcoin was credited into B2C2's account that day.

      But the next day, the trades were reversed by Quoine, which is incorporated here, and the proceeds allegedly "misappropriated" from the account without authorisation.

      Quoine told B2C2 it was entitled to do so because the trades were "mostly trades with huge mark-up over fair global market price", the suit said.

      B2C2 claims Quoine had "acted fraudulently" because the agreement stated that an order, once filled, is "irreversible".

      It is seeking to recover 3084.78582325 bitcoin from Quoine in the High Court.

      Quoine, a fintech firm that offers cryptocurrency-related services, was co-founded by Mr Mike Kayamori, who has held senior roles at Mitsubishi Corp and Softbank Group.

      ABNORMAL RATE

      No dollar value for that amount of bitcoin was provided in the lawsuit, but according to cryptocurrency exchange CoinDesk, that amount translates to US$3.78 million based on an exchange rate of US$1,226.94 for one bitcoin on April 19.

      Quoine, in turn, claims B2C2 is "being opportunistic and seeking to profit from a technical glitch". It said the trades were executed at the "abnormal rate" of 10 bitcoin for one ethereum, about 125 times higher than the actual market price then because of a technical glitch.

      It said the average market price that day was only about 0.03929075 bitcoin for one ethereum.

      The glitch severely disrupted Quoine's ability to retrieve actual market prices for bitcoin and ethereum.

      It said the glitch arose because it was reconfiguring passwords for its critical systems to fend off persistent attempts by hackers to break into its systems.

      Given the "stark difference between the abnormal rate and the actual market prices of bitcoin and ethereum on April 19", B2C2, which Quoine called a "sophisticated" investor with experience trading virtual currencies, should have suspected the "abnormal rate" was a mistake.

      It also noted B2C2 had done other bitcoin and ethereum-related trades on Quoine at prevailing market rates between April 15 and 18.

      Public resources such as CoinDesk and WorldCoinIndex would have shown that the abnormal rate could not be an accurate reflection of the market prices of these two virtual currencies on April 19, Quoine said.

       

      TNP

  • andrewlieng's Avatar
    8 posts since Oct '17
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