B2C2 Ltd. placed seven orders on April 19, 2017, to sell ether for bitcoin at the rate of ten BTC for one ETH, but Quoine reversed the order the following day. B2C2 then sought the court’s intervention to help in the recovery of 3,092 bitcoins involved in the trade asserting that Quoine had acted in a breach of trust as its custodian.
Breach of Contract and Breach of Trust
The Singapore International Commercial Court (SICC) published the case summary on March 14, 2019, and placed the blame squarely on Quoine Exchange. The court ruled that the exchange was liable for a “breach of contract and breach of trust” by reversing B2C2’s trades for 3,092 bitcoins belonging to the crypto market maker done at an “abnormal” exchange rate two years ago.
According to the court’s report, B2C2 Ltd. made seven trades where it sold ether (ETH) at ten bitcoin (BTC) per token, which was at least 250 times higher than the trending market rate of 0.04 BTC for one ETH at that time.
Quoine went ahead and automatically credited the proceeds of the trades to B2C2’s account, and the corresponding amount of 309 ETH was debited. For the uninitiated, B2C2 is one of the largest liquidity providers in the crypto space.
System Malfunction Led to Disputed Trades
Quoine discovered the anomaly the following day and unilaterally canceled the seven trades before resetting the account balances to their pre-trade state. Feeling aggrieved, B2C2 sued Quoine in August 2017, aiming to recover from the exchange the 3,092 bitcoin, which are worth approximately $12 million at the current rate. B2C2 told the court at the time:
“Quoine had no contractual right unilaterally to cancel the trades once the orders had been affected.”
In its defense,