A major bitcoin exchange with a strong presence in Japan, Quoine, is being sued for reversing bitcoin-ether trades after it allegedly suffered from a system glitch. Cryptocurrency trades on the platform are supposed to be irreversible, so the plaintiff claims Quoine acted fraudulently and seeks the return of 3,085 bitcoins.
Quoine Sued for Reversing Trades
One of Asia’s largest bitcoin exchanges, the Singapore-based Quoine, is reportedly being sued over the reversal of bitcoin-ether trades. This lawsuit is the country’s first bitcoin-specific legal dispute, according to The Straits Times on Monday.
The plaintiff is a market marker known as B2C2, who placed sell orders on Quoine’s platform at the rate of 10 bitcoins for one ETH on April 19, when the market price of one ETH was about 0.04 bitcoin. The orders were filled and credited on the same day; B2C2 paid 309.2518 ETH and received 3092.517116 bitcoins. However, the next day Quoine reversed the trades and deducted 3084.78582325 bitcoins from the market maker’s account without authorization, the news outlet detailed.
The trades were “inadvertently” executed at the “abnormal rate of… 10 bitcoins for one ethereum, which was approximately 125 times higher than the actual market price of ethereum on April 19,” the exchange admitted. Quoine attributed the cause to a technical glitch which occurred when it was “reconfiguring passwords for its critical systems to fend off persistent attempts by hackers to break into its systems,” adding that:
The glitch severely disrupted Quoine’s ability to retrieve actual market prices for bitcoin and ethereum.