Electronic market maker claims fintech firm 'acted fraudulently' by reversing trades
Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris, France, May 27, 2015.PHOTO: REUTERS
Singapore's first legal dispute involving the cryptocurrency bitcoin has erupted over trade proceeds worth around US$3.78 million (S$5.15 million).
An electronic market maker is suing Quoine, one of the world's major bitcoin exchange operators, over trades that were allegedly wrongfully reversed, which resulted in proceeds being deducted.
The market maker, B2C2, said it placed orders on Quoine's platform to sell ethereum - another cryptocurrency - for bitcoin at the price of 10 bitcoin for one ethereum.
The orders were filled in a series of trades on April 19, resulting in B2C2 paying 309.2518 ethereum for 3092.517116 bitcoin.
The bitcoin was credited into B2C2's account that day.
But the next day, the trades were reversed by Quoine, which is incorporated here, and the proceeds allegedly "misappropriated" from the account without authorisation.
Quoine told B2C2 it was entitled to do so because the trades were "mostly trades with huge mark-up over fair global market price", the suit said.
B2C2 claims Quoine had "acted fraudulently" because the agreement stated that an order, once filled, is "irreversible".
It is seeking to recover 3084.78582325 bitcoin from Quoine in the High Court.
Quoine, a fintech firm that offers cryptocurrency-related services, was co-founded by Mr Mike Kayamori, who has held senior roles at Mitsubishi Corp and Softbank Group.