Best trading platform for cryptocurrency in singapore
In an indication of the complexity of digital currency disputes, a Singapore court has referred a dispute to a full hearing, declining to issue a summary judgment. The case highlights that in disputes about digital currencies the ability to reverse transactions may be a critical issue for trading parties. The need to intervene and unwind smart contracts also requires careful consideration.
These types of dispute require effective dispute resolution mechanisms. This matter has ended up in a reputable court, but the issue would have been more complicated if the case had taken place in a less legally-friendly country. In this case before the Singapore International Commercial Court, UK registered business B2C2 Ltd, which buys and sells virtual currencies, applied for a summary judgment against Singapore-based currency exchange platform Quoine Pte Ltd. B2C2 argued that Quoine acted in breach of the contract between them when the platform reversed transactions for the sale and purchase of the cryptocurrencies ethereum and bitcoin.
The transactions were reversed after Quoine identified that a computer error had occurred which caused the value of the assets being exchanged to become skewed. B2C2, which stood to benefit from the mistake, argued that Quoine had acted in breach of contract when the platform 'corrected' the error by reversing the best trading platform for cryptocurrency in singapore. However, the Singapore International Commercial Court rejected B2C2's bid for summary judgment, meaning the case will now be considered at a full trial.
Although the case before the Singapore International Commercial Court does not give rise to any form of precedent in England and Wales, the summary judgment application was heard by an English judge, Simon Thorley. It is also one of the first known cases to consider cryptocurrency trading. B2C2 opened an account on the Quoine platform online and agreed to the terms and conditions. Note that as markets move continuously, the prices displayed on user interfaces, on our web app or on mobile apps are in no way guaranteed.
The Platform, however, has been designed to allow members to fill at best possible prices and in a timely manner. Nevertheless the Company will not be liable under any circumstances for the consequences of any delay in order filling or failure to deliver or perform.
According to the ruling, the trades at issue were "limited orders". This meant that the trader, in this case B2C2, was able to either set the maximum price at which it was willing to buy or a minimum price at which it was willing to sell. Once that price had been matched, the platform would fulfil the order. The traders are able to control the price at which they sell, but not the timing of the trades.
All the orders placed via the platform best trading platform for cryptocurrency in singapore recorded in an orders book and the platform also displays best trading platform for cryptocurrency in singapore 'trading dashboard' to indicate the current fair market price for the items.
The trading dashboard also makes use of software, referred to in the ruling as 'the quoter program', to display actual prices for completed trades on the platform and trades on other major currency exchanges.
Slightly more complicated is that members can trade using their own assets or using funds borrowed from Quoine or other platform users. However, the member must have assets in its account which are used as collateral. This is "margin trading". In the event that a margin trader's equity, which is calculated by reference to the market value of their collateral, falls below a certain percentage of the value of their loans, the platform will automatically force close the trader's positions to prevent further loss.
These are termed 'stop loss' orders. The platform relies on the quoter program to assess the margin trader's equity at any given time. On 19 April B2C2 placed orders to buy best trading platform for cryptocurrency in singapore sell ethereum for bitcoin. On that day, 15 such orders were fulfilled. Some of the orders — eight in total — are not the subject of dispute. Those orders transacted at a price of c. In one example, at However, some time after The glitch happened after changes were made to passwords and cryptographic keys on some of the critical systems within the platform, by Quoine's administrators.
However, in error, the new details were not updated on the quoter program. It meant that the quoter program could not connect to the database to update the true market prices.
According to the ruling, between It is not known why B2C2 offered sales at such inflated rates. Ordinarily the order would not be fulfilled as it is unlikely that any buyer would, in the circumstances, make an offer to buy at that rate, thereby triggering a match and a subsequent transaction.
However, because the quoter program could not access the market data, it best trading platform for cryptocurrency in singapore the only data available to it, namely B2C2's proposed sell price, as the relevant market data relating to the relative prices of the two cryptocurrencies. This erroneous data about the market value of the currencies set off a chain of events: The best trading platform for cryptocurrency in singapore used the only market price available to it for the purposes of evaluating the price of the forced bitcoin order to sell — this again being B2C2's order price.
The system then matched that to B2C2's order to buy bitcoin and this triggered the completion of the transaction. Quoine became aware of the technical glitch the next day and unilaterally reversed the trades. It returned the bitcoin to the forced-closed customers and the ethereum to B2C2.
B2C2 asserted that the transaction was validly executed, pointing to the express term in the contract that said that "once an order is fulfilled, you are notified via the platform and such an action is irreversible".
It argued that, as a result, the reversal of the transaction by Quoine represented a breach of this term. Quoine, however, contended that that term, properly interpreted, applied only to the parties to the transaction and not to it as the intermediary. This argument was rejected by the court. It said that the intention of the wording was to provide certainty to all parties, including Quoine. Quoine raised six further best trading platform for cryptocurrency in singapore, including that there was an implied term which permitted a reversal in the event of technical error, that the trades were void for common mistake, that the law of unjust enrichment would provide a remedy and that certain other terms provided exemption.
These were all rejected by the judge. Consequently, the judge did not make a summary judgment but ordered a full best trading platform for cryptocurrency in singapore of these matters and defences. He set out details of the two defences that were to be investigated. In relation to the first defence, a Risk Disclosure Statement had been uploaded to the Quoine's website in March Under the heading 'System Risks', the statement said:.
The system may produce an aberrant value for the buy or sell price of the virtual currency calculated by the system. Please be aware that if the Company finds that a transaction took effect based on an aberrant value, the Company may cancel the transaction.
Quoine contends that this Risk Disclosure Statement changed the terms on which users could trade on the platform. B2C2 has disputed this. With regards to the second defence that the court has deemed is arguable at trial, on the doctrine of unilateral mistake, Quoine said that in the circumstances, the contract is rendered void. According to Singapore law, to succeed in rendering a contract void for unilateral mistake, Quoine must show that there best trading platform for cryptocurrency in singapore a sufficiently important or fundamental mistake as to a term of the contract and that B2C2, seeking to enforce the best trading platform for cryptocurrency in singapore, had actual knowledge of the mistake at the time of contract.
In that case a website advertised printers at a significantly reduced price in error. It was held in that case that the party who placed an order for more than 4, printers knew that the stated price was an error.
However, here the situation is complicated by the fact that the transaction was between B2C2 and the fore-closed customers — not Quoine, with Quoine's platform mediating the transaction. The circumstances raise a number of questions: Did B2C2 have actual knowledge of that mistake? What is the impact of the computer glitch? These issues were acknowledged by ruling judge Simon Thorley.
Where computers are concerned, the law is less well developed. When can the workings of a computer or computer program constitute actual knowledge on the part of the programmer or operator of the computer? The issues were also touched upon by the judge in the Chwee Kin Keong v Digilandmall. This can result from human interphasing, machine error or a combination of such factors.
Examples of such mistakes would include a human error b programming of software errors and c transmission problems in the communication systems. Such errors can be magnified almost instantaneously and may be harder to detect than if made in a face to face transaction or through physical document exchanges. Who bears the risk of such mistakes? It is axiomatic that normal contractual principles apply but the contractual permutations will best trading platform for cryptocurrency in singapore be sometimes more complex and spread over a greater magnitude of transactions.
The financial consequences could be considerable. The court has to be astute and adopt a pragmatic and judicious stance in resolving such issues.
The Singapore International Commercial Court will need to grapple with these issues when the matter comes to full trial. To a large extent the case is interesting because it relates to bitcoin and other cryptocurrencies. Even though the technologies which underpin bitcoin and block chains are not at issue, the case relates to the technology and platforms that are developed in order to trade in bitcoin and other cryptocurrencies.
The case indicates that parties involved with bitcoin, blockchains and smart contracts should best trading platform for cryptocurrency in singapore mindful that: For further information, please contact: The following express terms were also set out in the contract: Under the heading 'System Risks', the statement said: It is unlikely that Quoine could have so easily reversed the transaction as it did; these types of dispute require effective dispute resolution mechanisms.
No doubt this has added to the cost for B2C2, but at least this is a very reputable court with highly accomplished judges. However, what would the position have been if the trading platform had been based in another, not so legally-friendly, jurisdiction?
Perhaps the parties should consider international arbitration as the appropriate forum for these types of dispute, not only to avoid any undesired national court becoming involved, but also to allow the parties to elect an arbitrator s with the requisite technical knowledge.