Cryptocurrency organizations have gained more prominence in the financial world over the last few months, mainly due to rapid advances in the industry. Apart from the positive developments, the cryptoverse has also been mired in significant controversies.
The latest cryptocurrency company to be hit by a scandal was Quoine, a popular currency exchange operator in Singapore. The Singapore Court of Appeal recently gave its ruling involving the exchange and another trader, B2C2.
The Court of Appeal stated that Quoine has to pay for damages caused to B2C2 for wrongfully reversing seven transactions that occurred in 2017. Quoine claimed that the reversals were done keeping in mind the policies of the exchange. The Singapore based body added that the seven transactions seemed fraudulent at the time and that is why they were reversed.
Quoine tried to appeal the Court’s decision by stating that users who were involved in trades with B2C2 did not know that the trades were not at market price. What made this case so significant was the fact that it was the first crypto case to be taken to court in Singapore.
The problem started in early 2017 when an internal incident within the Quoine system disabled its access from other systems. Right after this, the B2C2 emergency protocol allowed it to trade Bitcoin at a rate of 10 BTC for 1 ETH. On April 19, 2017, seven trades were conducted between B2C2 and Quoine where 3092 BTC was credited to B2C2. This was done by paying just 309 ETH, an absurd 250x on the actual price.
B2C2 took Quoine to court because they claimed that the trade cancellations were a breach of trust and security. This was the same conclusion reached by the Singapore International Commercial Court, which found Quoine guilty of customer malignment.
The court panel comprised of Chief Justice Sundaresh Menon, Judges of Appeal Judith Prakash and Andrew Phang along with International Judge Robert French. The bench dismissed Quoine’s Senior Counsel Stanley Lai’s comments and stuck to the point that Quoine was guilty of contract violation. Singapore has been taking steps in improving its fintech industry because of the large influx into its ecosystem
No penalty has been decided by the court as of yet but many expect the trade reversal to be called off. The Court of Appeal has given the benefit of the doubt to B2C2 because the platform was not aware of the internal working of Quoine. Cryptocurrency supporters were happy to note that institutions were taking a keen interest in solving issues related to virtual assets.