International Judge Simon Thorley of The Singapore International Commercial Court has ruled that the case centering on a reversed trade of 3,092 bitcoin (B2C2 Ltd v. Quoine Pte Ltd) will proceed to trial. He denied the application for summary judgment (judgment without trial) from the plaintiff, cryptocurrency market maker B2C2 of the UK, on the basis that he finds a further investigation into the trade is warranted. The defendant in the case is the Singapore-based exchange Quoine. The 3,092 bitcoin in question are valued at about $44 million as of December 29, 2017.
In April 2017, B2C2 placed seven orders within about 1.5 minutes, selling 309 ether (ETH) for 3,092 bitcoin (BTC). The court document states this was “a rate approximately 250 times the rate of about 0.04 BTC for 1 ETH previously being quoted” at the time. The reason for this highly unusual exchange being processed without oversight or disruption was reportedly a computer glitch; passwords and keys for some of the platform’s systems were changed that day.
But by “oversight,” they were not implemented to the login credentials for Quoine’s ETH/BTC quoter program. This meant that at the time, “no true market price could be set,” according to the court. The next day, Quoine realized the mistake had occurred and reversed the trades, reclaiming the 3,092 bitcoin without notification or discussion with B2C2.
B2C2 took the matter to the High Court to reclaim the highly valuable cryptocurrency in May. The case was transferred to the Singapore International Commercial Court in August. In September, B2C2 requested a summary judgment, meaning they thought the merits of their case were strong enough to deserve a judgment without a trial. In December, the summary judgment was denied.
“In the present case, I do not consider that the Plaintiff’s responses to the Defendant’s arguments are sufficient to deny it the right to a trial,” Thorley writes in his decision.
Not surprisingly, a central point of contention is whether the reversal of the trade was allowed. Quoine’s online terms and agreements state “once an order is filled, you are notified via the Platform and such an action is irreversible.” Quoine has since argued that the term “irreversible” does not apply to it. The judge wrote, “I am unable to accept this.” However, Thorley also felt that more time was needed to examine the trading mistake in greater detail along with the “law on unilateral mistakes where computers are involved,” and “the facts behind the setting of the abnormally high offer price” by the Plaintiff.
Quoine terms also establish that users “expressly agree that any claim or dispute arising from your use of our website and/or our services will be governed by the laws of Singapore.”