In what very well may later be viewed as a historic moment in Singapore’s relationship with cryptocurrency, the country’s first Bitcoin-related legal dispute will soon begin trial in the Singapore International Commercial Court (SICC) after the Judge Simon Thorley refused to issue a summary judgment.
At the heart of the legal battle are trade proceeds originally paid in the amount of $3.78 million worth of BTC. Since the payment, however, the price of BTC has swollen past $13,000 (at the time of press), bringing the value of the proceeds to over $36 million.
Claims of Wrongful Reversals
The plaintiff in this case is B2C2 Ltd., a London-based cryptocurrency liquidity provider. In July, the company sued Quoine, an exchange-operating company that provides a variety of other crypto-related financial services. Quoine has offices in Singapore, Japan, and Vietnam.
According to Grace Leong of the Straits Times, the lawsuit was filed “over trades that were allegedly wrongfully reversed, which resulted in the proceeds being deducted.” If B2C2 is successful, the company “is entitled to recover the bitcoins itself, or the value of the bitcoins taking into account any increase in value since the alleged breach.”
The outcome of the case may determine the standards by which exchanges are allowed to reverse trades that take place on their platforms. Danny Ong, the lawyer representing B2C2, alleged that the company reversed a series of trades amounting to the sale of 3,092.517116 Bitcoins for 309.2518 Ethereum without permission.
Quoine refuted the claims, arguing that the orders resulting in the trades had only been fulfilled because of a technical glitch. In a statement to B2C2, Quoine alleged that the trades were made with ” with huge mark-up over fair global market price,” which gave them precedence to execute the reversal.
Singapore’s “Lenient” Attitude
A recent study from the University of Luxembourg Faculty of Law, Economics, and Finance pointed to Singapore as one of the world’s “leading examples” of a country with a relatively more “lenient” attitude toward regulating cryptocurrency.
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In October, Monetary Authority of Singapore Managing Director Ravi Menon said that he sees “no basis for wanting to regulate cryptocurrencies.” Rather, he believes that it is important to stay keen to “activities surrounding the cryptocurrency” in order to prevent money-laundering and other kinds of illegal activity.
Singapore’s open-minded financial regulatory attitude seems to extend past cryptocurrency. Indeed, the SICC is a self-described “companion rather than a competitor to arbitration as it seeks to provide parties in transnational business with one more option.” The agency seems to aim to facilitate healthy trade policy rather than crack down indeterminately on everything in its path.
As Bitcoin and cryptocurrency become a more regular part of the mainstream fintech world, cases like this one become ever more important. While governments around the world are moving swiftly to regulate cryptocurrency, legal precedence for countless undiscovered circumstances has not yet been established.
When more cases like this one arise (and they most definitely will), the world’s regulatory attitude toward cryptocurrency will continue to be shaped. We can only hope that Singapore’s historically crypto-friendly mindset will, well, stay that way.