Singapore Rules for A Trader In Its First Crypto Court Case
A Singapore court recently noted that the trade reversal practice on exchanges is not right. The ruling came in favor of trader B2C2 against a cryptocurrency exchange firm dubbed Quoine. & orders by B2C2 were canceled by this exchange firm Quione in the 2017 bull market period.
Both parties, in particular transactions, were autonomous algorithms; there was no chance of human errors. Exchange operations involve deriving the prices of the crypto assets from other crypto exchanges.
The other exchange platforms could not access and autonomously update prices from different exchanges during this incident. The software that B2C2 was using initiated an emergency protocol, which included a 10 BTC for 1 ETH fail-safe price, which was used to settle seven trades in 2017.
This led to enormous benefits to the trader B2C2 since he received about 3092 Bitcoins for about 309 Ethereum debited, 250 times more than the actual price. The exchange company Quione immediately canceled the transaction, and B2C2 went to court.
Five judges were presiding over the case, and four favored B2C2, stating that the B2C2 trader did not leverage the mistake.
The happenings were contract-based between the trader and owner; therefore, although the exchange is not entirely at fault, it should take care of its program and pay for its programs’ mistakes.
The reasoning behind the judgment was a breach of contract and trust on the exchange platform. However, the damages sum will be decided soon.
Su Zhu, Three Arrow Capital’s CEO, commented, stating the B2C2 win is big. That sends a warning to crypto exchanges who breach contracts and reverse trade.
Henceforth, it is clear that trade reversals will lead to severe legal tussles that may negatively impact the person breaching the contracts.