Singapore’s Court of Appeals has ruled against Quoine in a landmark case against the digital currency exchange for breach of contract, in which the Quoine platform illegally reversed 7 trades.
The case is a first in Singapore involving cryptocurrencies and actually started 3 years back.
Quoine is the parent company of Japan’s trading platform Liquid and now has to go through settlement proceedings. After its appeal, in which it claimed that it had the right to cancel the market marker B2C2’s orders placed on its platform because the transactions were mistakes, was rejected.
What Did Quoine Argue?
In the appeal, Quoine argued that parties using the B2C2 trading software were under the false impression that the trades were taking place at fair market value while B2C2 was aware they were not priced correctly.
The court’s reasoning for the appeal was focused on how the mistake should be legally interpreted and applied, seeing that the contracts had been executed and drawn up by computers and not humans.
What Brought About the Lawsuit
The lawsuit was brought on by Quoine's resetting of B2C2’s balances to the same state as before the 7 trades took place, a day after the trades have been made. In March 2019, it was ruled by the Singapore International Commercial Court that Quoine was responsible for a breach of contract and trust by reversing these trades.
However, Quoine subsequently filed for an appeal against this decision. 4 out of 5 judges that presided over the appeal dismissed the arguments brought forward by Quione.
The judges further added that the programmer’s knowledge is the only one relevant for the digital agreement between computer systems and platform users. As a result, there was no problem with the trading contract and even if it had been a flaw, the B2C2 software wouldn't have been aware of it during the execution of orders.