The first legal dispute involving Bitcoin in Singapore has officially begun today and was heard in the Singapore International Commerce Court. The trial involves B2C2, an electronic market maker, and the cryptocurrency exchange Quoine. For those that are unfamiliar, market makers allow for liquidity in various exchanges, through the bid-offer spread, by buying and selling financial instruments of all kinds.
Mike Kayamori, co-founder and CEO of Quoine, with his employees
While the court documents did not specify a dollar amount, the disputed amount involves 3,085 Bitcoin. According to the price of Bitcoin at press time, this translates to around $13.9 million dollars. The dispute revolves around seven trades made in April 2017, when Bitcoin was worth less than it is currently.
The court is expected to decide whether several trades made on the Quoine platform had been wrongfully reversed. B2C2 opened the case with the following statement:
“It is B2C2’s contention that in the face of serious risk of itself having to bear the financial loss arising from the trades…Quoine chose to the most advantageous course to mitigate such risk – by simply reversing the ‘irreversible’ trades and deducting the bitcoin proceeds from the account.”
Quoine contends that the reversal was due to a programming glitch and that the glitch caused the platform to stop creating or placing new orders. They pointed out that the trades were extremely abnormal, stating “they were about 250 times higher than the average price”. B2C2 contends that no matter how unusual the orders are – they should not have been reversed.
B2C2 Founder Max Boonen
The founder of B2C2 Max Boonen took the stand today. He was questioned as to the role of a market maker, and whether his company and others like it, should be responsible for price action. He responded that he had no influence over prices.
The trial is set to conclude next week and could set an important precedent for future disputes involving cryptocurrency in the country.