Singapore court’s cryptocurrency decision: Implications for cryptocurrency trading, smart contracts and AI

Publication September 2019


Singaporean court’s decision in relation to cryptocurrency trading has implications for cryptocurrency trading mistakes, smart contracts, artificial intelligence and whether cryptocurrency is property. 

B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(l) 3, the Singapore International Commercial Court’s first cryptocurrency judgment, is significant as Simon Thorley IJ applies well-established contractual principles and considers the doctrine of mistake in the context of cryptocurrency trading mistakes and automated contracts entered through computer programming.   We discuss the key novel points arising from the case and consider the implications for digital assets, smart contracts and artificial intelligence.

In B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(l) 3, Simon Thorley IJ sets out important guidance on how to apply the law of mistake in circumstances where legally binding contracts were performed by an automated contracting system without human intervention.  The court had to decide how to determine the question of knowledge of the parties when transactions were carried out by computers acting as programmed.  The court also had to consider whether cryptocurrencies constituted property capable of being held on trust, and what remedies were appropriate for breach of contract or breach of trust involving cryptocurrencies. 

There are now a number of reported instances of mistakes occurring in relation to cryptocurrencies.  It has been reported in 2019, for example, that a cryptocurrency exchange accidentally transferred cryptocurrency to clients by a computer error.1 Such situations raise novel issues, which courts in many jurisdictions across the globe are grappling with, and they are often doing so in the absence of any direct authority or legislative guidance.

Some cryptocurrency mistakes have already been litigated. In 2018 the British Columbia Supreme Court in Copytrack Pte Ltd. v. Wall2 granted an order to trace mistakenly transferred cryptocurrencies (the court felt it was inappropriate to consider many of the substantive issues concerning the legal status of a cryptocurrency on a summary judgment application). 

The court in B2C2 Ltd v Quoine Pte Ltd was not similarly constrained. Accordingly, the judgment could have significant legal implications for cryptocurrencies, automated contracting systems, smart contracts and potentially artificial intelligence, if courts in other jurisdictions come to the same conclusions. In this briefing, we discuss the novel issues that arose in the case and consider the implications.


B2C2 had entered into a membership contract with Quoine under which B2C2 could make trades of cryptocurrencies with other counterparties on Quoine’s automated cryptocurrency trading platform (the Platform). B2C2 initiated trades of Ethereum (a cryptocurrency) in exchange for Bitcoin (another cryptocurrency) on the Platform; However, due to programmed functionality in the Platform, which had consequences that had not been anticipated by Quoine, the Platform executed the B2C2 trades at an exchange rate approximately 250 times the then current market rate, in favour of B2C2. B2C2’s account was automatically credited with the proceeds of the trades. 

When Quoine’s Chief Technical Officer later manually reviewed the trades, he considered that they were the result of an error and reversed them, notwithstanding that the membership contract provided that trades were “irreversible”. 

B2C2 brought an action against Quoine, claiming that in reversing the trades

  • Quoine’s actions were a breach of the contract between B2C2 and Quoine in relation to participating in the Platform
  • Quoine was in breach of trust.

Quoine, on the other hand, argued that

  • there was no breach of the contract between it and B2C2
  • if there might otherwise have been a breach of contract between B2C2 and its counterparties in relation to the trades, such contracts had been entered into by mistake and were therefore void
  • there was no breach of trust.

The court ultimately found in B2C2’s favour. In reversing the trades, Quoine had breached its contract with B2C2, and Quoine had failed to establish a mistake that would make the contracts for trades void.  As a result, it also held that Quoine was in breach of trust. A subsequent hearing on the question of the amount of damages was ordered, if damages could not be agreed between the parties.

What were the issues?

For the purposes of this briefing, we will focus only on the following key novel points raised in the case

  • could the automated nature of the Platform give rise to transactions that have legally binding contractual effect?
  • how is knowledge to be determined for the purposes of establishing mistake where contracts are entered into on an automated basis by a computer, and not through human decision-making? (We do not consider the court’s findings on the law of mistake more widely)
  • is cryptocurrency a type of property that may be the subject of a trust?
  • what kind of relief is appropriate in the cases involving cryptocurrencies?

Does automated contracting give rise to an enforceable contract?

The Platform in B2C2 Ltd v Quoine Pte Ltd enabled transactions to be entered into automatically.   Did these have contractual effect?  The question was not raised explicitly in the dispute; the parties (and the court) apparently accepted that contracts for the trades had arisen even though they were instigated automatically by the Platform – the court (Simon Thorley IJ) noting that “there is more than one contractual relationship that will exist when parties trade on a currency platform.3

That assumption is consistent with earlier authority that did specifically address the issue.  In a prior English authority, Software Solutions Partners Ltd, R (on the application of) v HM Customs & Excise [2007] EWHC 971, the facts were that insurance brokers who used a software system provided by Software Solutions Partners (SSP) were able to enter into insurance contracts on behalf of their customers with insurers who were using the same system.  The broker would input the details for the required insurance product into the system, and the system would calculate quotes available from insurers participating in the system and determine whether the risk was acceptable to the relevant insurer (without referring the issue back to the insurer).  Once the customer accepted the price and terms of insurance cover, the policy contract was generated by the system and the insurer was bound by it.  The system then produced the necessary paperwork.

Although the main issue in the case was whether SSP’s services were VAT tax exempt, the English High Court made some observations about contract formation.  It said that, in legal terms, it was the insurer that made the binding offer of insurance (rather than a mere “invitation to treat”) and that it was the broker, on behalf of its principal (the customer), that gave acceptance, “such acceptance being presumably effective when received on SSP’s information system, or on the information system of such other party as might be stipulated in any operating protocol to which SSP, broker and insurer may be party”.4

The court noted that:

“all the information necessary for electronic contract formation has been pre-programmed, according to strict parameters laid down by the insurer, in the SSP computer software … . The relevant data is, therefore, processed automatically by electronic means through the computer software, and the transactions are self-executing within the specified parameters pre-determined in the programme. Once the broker, using his computer and accessing the SSP software, has input the appropriate data, the ‘offer’ is automatically generated by the programme itself without further human intervention; and once the broker has taken the steps required by the computer programme necessary for an ‘acceptance’ of the offer, the acceptance is automatically processed by the programme itself, again without further human intervention."5

The court observed that “the electronic process of contracting was automated”6 and that:

“the correct legal analysis is that the relevant insurers, expressly or impliedly, invited brokers who had access to the appropriate SSP software to use the computer programme for the purpose of contract formation, and that the insurers undertook that, if the brokers followed the pre-programmed procedures, they would be bound by the automatically generated result, even if they (the insurers) were temporarily unaware of that result.”7(Emphasis added).

Drawing an analogy with Thornton v Shoe Lane Parking [1971] 2 QB 163, in which an English court held that a ticket vending machine was an offer, the court said:

“Similarly, in the present case, insurers hold out the SSP software as the automatic medium for contract formation. Once the broker, like the plaintiff in Thornton putting his money into the machine, has input the necessary data into the electronic process, no further human intervention is necessary for the formation of a binding contract between broker and insurer.”8 (Emphasis added.)

Even though the contracts were made electronically, rather than mechanically, that did not “alter the application of the basic legal principles.”9

Such reasoning will be important when considering, for example, whether new technologies, such as smart contracts operating on blockchains, can have legally binding contractual effect when they act automatically or even autonomously in purporting to bring parties together into contractual relations.  For more information, see our briefing, Can Smart Contracts Be Legally Binding Contracts?

What are the implications for artificial intelligence?

Another Singaporean case, Chwee Kin Keong and Others v Pte Ltd [2005] 2 LRC 28I, took a similar approach to the issue of automated contracting. The Singaporean High Court observed that:

“It is not really in issue that contracts can be effectively concluded over the internet and that programmed computers sending out automated responses can bind the sender. … The fact that the acceptance was automatically generated by a computer software cannot in any manner exonerate the defendant from responsibility. It was the defendant’s computer system. The defendant programmed the software.10  (Emphasis added.)

In other words, the pre-determined program logic should simply be equated with the actions of the party that put it in motion. This view is also reflected in B2C2 Ltd v Quoine Pte Ltd where Thorley IJ decided that, when the law is faced with a contention that a contract made by and between two computer systems acting as programmed but otherwise without human intervention is void or voidable for mistake, it is necessary to have regard to the mindset of the programmer when the relevant programs were written, not at the later time when contracts were entered into. The Platform was different from, say, the operator of a kitchen blender, where a person causes the machine to work and where knowledge should therefore be determined at the time of operation.

Thorley IJ drew a distinction between deterministic computers, on the one hand, and artificial intelligence, on the other, noting that the latter could “be said to have a mind of its own.”11 He observed that the Platform was “largely deterministic. It produces the exact same output when provided with the same input.”12 As such, its algorithms:

“do and only do what they have been programmed to do. They have no mind of their own. They operate when called upon to do so in the pre-ordained manner. They do not know why they are doing something or what the external events are that cause them to operate in the way that they do.

They are, in effect mere machines carrying out actions which in another age would have been carried out by a suitably trained human. They are no different to a robot assembling a car rather than a worker on a factory floor or a kitchen blender relieving a cook of the manual act of mixing ingredients. All of these are machines operating as they have been programmed to operate once activated.

Where it is relevant to determine what the intention or knowledge was underlying the mode of operation of a particular machine, it is logical to have regard to the knowledge or intention of the operator or controller of the machine. In the case of the kitchen blender, this will be the person who put the ingredients in and caused it to work. His or her knowledge or intention will be contemporaneous with the operation of the machine. But in the case of robots or trading software in computers this will not be the case. The knowledge or intention cannot be that of the person who turns it on, it must be that of the person who was responsible for causing it to work in the way it did, in other words, the programmer. Necessarily this will have been done at a date earlier than the date on which the computer or robot carried out the acts in question. To this extent I reject B2C2’s contention that the only relevant knowledge is knowledge at the time of contracting. I agree with Quoine that regard should be had to the knowledge and intention of the programmer of the program in issue when that program (or the relevant part of it) was written. Accordingly, in my judgment, in circumstances where it is necessary to assess the state of mind of a person in a case where acts of deterministic computer programs are in issue, regard should be had to the state of mind of the programmer of the software of that program at the time the relevant part of the program was written.”13

Although determined in the context of the law relating to mistake, what are the potential implications of such findings in relation to autonomous systems (those that act or make decisions independently of humans), and artificial intelligence in particular? There are many areas of law (not just the law of mistake) where actual or constructive knowledge is relevant, for example, the law of negligence.

The judgment

  • suggests that, for deterministic systems (that is, systems that may be automated but are not autonomous), knowledge might need to be assessed at the time of programming and by reference to the programmer. This may be problematic in cases where the relevant program has itself been written by a program, as is increasingly common
  • also suggests that, for truly autonomous systems, the enquiry may be different. Would a court still look to the state of mind of the programmer, or would it look to, say, the (typically) opaque subroutines of the algorithm during subsequent system operation to determine knowledge, and attribute that to the relevant party? Extremely complex factual enquiries may result from such an approach
  • leaves unanswered what a court’s approach might be to probabilistic computing (that is, computing that is, say, neither deterministic nor autonomous, but based on a probability that something is the correct answer. Quantum computing is an example.

It is likely that, without regulation, we may see cases dealing with issues like these in determining matters such as civil liability and criminal responsibility in relation to the operation of artificial intelligence. For more information, see our site: Artificial intelligence.

Is cryptocurrency a type of property?

To succeed on its claim for breach of trust, B2C2 had to first establish that a trust over the cryptocurrencies could be, and had been, created. There had been no express agreement between B2C2 and Quoine (nor any other user of the Platform) that cryptocurrencies would be held on trust, so the court had to consider whether nonetheless a trust had been created by reference to whether the three elements of a trust had been satisfied: certainty of intention, certainty of subject matter and certainty of objects.

The second element, certainty of subject matter, is of most interest here given it required determining whether cryptocurrencies may be treated as property which may be held on trust. In this case, Quoine was prepared to assume that cryptocurrencies satisfied that criterion. Thorley IJ confirmed, obiter, that this was indeed the correct approach:

“Cryptocurrencies are not legal tender in the sense of being a regulated currency issued by a government but do have the fundamental characteristic of intangible property as being an identifiable thing of value.”

The court was satisfied that cryptocurrencies met all the requirements of the classic definition of a property right set down by the House of Lords in National Provincial Bank v Ainsworth:14 “definable, identifiable by third parties, capable in its nature of assumption by third parties, and hav[ing] some degree of permanence or stability.”

Regrettably, the court did not consider the precise nature of the property right (as that point was not in dispute), although it noted that it was the subject of academic debate. It is disappointing that this opportunity was not taken, as the nature of the property right is important. For example, it will be critical in ascertaining the location of property (its situs) and the law governing transfers of property (that is, alienation). It is also significant in matters of insolvency, insurance, inheritance and taxation, amongst others.

The court went on to decide that the other two elements of a trust were also satisfied:

  • certainty of intention to create a trust was satisfied, despite the absence of express language, by Quoine’s conduct in holding the assets of other users of the Platform in electronic wallets separate from Quoine’s own trading assets – the court interpreted this as evidence of Quoine’s intention to hold those asset on trust
  • certainty of objects (i.e. whether the intended beneficiaries of the trust were identifiable) was satisfied by the fact that the users of the Platform were identifiable by individual account numbers.

The Singaporean courts are not alone in tending towards treating cryptocurrencies as property. Courts from Ohio to California to South Korea have handed down decisions finding cryptocurrencies to be property. In China, despite a ban on initial coin offerings (ICOs), cryptocurrency exchanges and Bitcoin mining, some courts and tribunals have held cryptocurrencies to be property. Similarly, the English courts have been willing to issue proprietary injunctions over cryptocurrencies (see below discussion).

What remains wanting, however, is clear guidance on the exact nature of cryptocurrencies – most agree that is it not a chose in possession, but is it a chose in action, or something else entirely? Also, importantly, is this a question appropriate for courts to determine at all, or is it one that requires legislation?

For more information on the legal nature of cryptocurrencies, see our briefing on Deciphering Cryptocurrencies.

The relief granted: implications for future cryptocurrency litigation?

The characterisation of cryptocurrency as property has other significant implications in law, particularly in relation to the relief available to a party who has suffered loss. In B2C2 Ltd v Quoine Pte Ltd the primary relief sought was specific performance (i.e. re-execution of the trades at prevailing rates). Quoine objected that that would have led B2C2 to an even more advantageous position, given further fluctuations in the market. The court agreed. Considering the volatilities of the market, the court found that the proper relief lay only in damages:

“in these circumstances granting specific performance would cause substantial hardship to Quoine which any potential difficulty in assessing damages does not outweigh”.15

Thorley IJ explained that he was unpersuaded by the argument that such volatility necessitated an order of specific performance as:

“courts are accustomed to assess damages in relation to volatile assets and this case will be no different”.

As such the court ordered a subsequent hearing on the amount of damages payable if the parties could not reach agreement in the interim.

An interesting alternate remedy (not sought in B2C2 v Quoine16 but mentioned by some commentators) would be for the court to order payment of damages in cryptocurrencies. This might resolve the issue, common among cryptocurrency claims and evident in the Quoine example, of volatility in the value of certain cryptocurrencies between the date of breach and date of judgment.

There is House of Lords authority in England and Wales dating back to the 1970s (a time of great volatility in the market for Sterling) to the effect that the courts are free to give judgment in any foreign currency, including currencies unconnected with the claim, as a matter of procedure. Some courts have been willing to treat Bitcoins as currency.17 It is not clear whether the Singaporean or English courts would follow suit; but it is worth noting the potential, in theory, for judgment to be made for delivery of a cryptocurrency in specie (i.e. in the real, precise, or actual form specified), in place of an order of monetary damages, if this would lead to a more just outcome.

The recent English case of Vorotyntseva v Money-4 Limited t/a & Ors18before Birss J gives further insight into how courts might deal with relief available in relation to cryptocurrency assets. The claimant, Vorotyntseva, successfully obtained a worldwide freezing order. Vorotyntseva had deposited Ethereum and Bitcoin (at the time worth an aggregate £1.5 million) in a cryptocurrency platform known as Nebeus in order to test that platform against a competitor which she had been using previously. Vorotyntseva subsequently became concerned that the funds, including the cryptocurrency holdings, might be dissipated, and in the absence of adequate confirmation that the assets were still held by Nebeus, sought a freezing order on short notice from the court. Birss J ultimately was satisfied that there was a real risk of dissipation. Of most interest, however, is that the court made both prohibitory and proprietary injunctions in the freezing order.

Birss J noted that there had been no suggestion that cryptocurrencies cannot be a form of property or that a party amenable to the court’s jurisdiction cannot be enjoined from dealing in or disposing of it. He was himself satisfied that the court can make such an order if it is otherwise appropriate. Therefore, in addition to being prevented from removing assets up to the aggregate value of the cryptocurrency holdings, the respondents were prevented from disposing or dealing with (other than by transfer to Vorotyntseva) the specific Ethereum and Bitcoin holdings.

This is in and of itself an interesting development. However, a proprietary injunction may in practice, be less useful as a means by which to preserve the status quo. While a prohibitory injunction may be served on third parties (such as a respondent’s bank), in order to prevent dissipation of the value of the assets, a proprietary injunction can only be served upon the respondent. Therefore, the claimant is reliant on the court’s power to enforce the proprietary order against the respondent.

It is a potentially powerful remedy in jurisdictions such as England and Wales, where the courts are prepared to commit respondents to prison for contempt for breaching court orders of this kind. However, it may not be as effective in other jurisdictions. It might also be less effective where the respondents are not identifiable, as is the case for some digital transactions where parties may be pseudonymous.19

Our thoughts

Disputes involving disruptive technologies, such as distributed ledger technologies, cryptocurrencies, smart contracts, artificial intelligence, and the Internet of Things, pose unique legal issues that are difficult to answer.

The issues explored in B2C2 Ltd v Quoine Pte Ltd. are some of the most difficult and pressing

  • what is the legal nature of a wholly autonomous contract?
  • who is liable for mistakes made where transactions are implemented by a machine without human intervention?
  • what is the legal nature of digital assets, and do they fall within the boundaries of the law of property?

These questions are not simply academic. They lie at the core of a stakeholder’s rights and remedies – in fact, they go to the fundamental question of whether there are any rights or remedies at all.

Innovations in technology have fast outpaced the rate of change in most legal systems, and it is clear that innovation – both technological and potential use cases – continues to develop at speed. The law is in an exciting phase of development as our courts and legislatures adapt to recognize and apply well-established legal principles in such innovative contexts. In the UK, the government-backed LawTech Delivery Panel has tasked the UK Jurisdiction Task Force with coordinating and preparing “an authoritative legal statement on the status of cryptoassets and smart contracts under English private law”. In Singapore, the Infocomm Media Development Authority (IMDA) is reviewing the Singapore Electronic Transactions Act to facilitate the digitalisation of transactions with the use of new technology such as distributed ledger technologies, smart contracts and biometrics. It is important to monitor and influence, where possible, these developments while the law is developing and in a state of flux.

Norton Rose Fulbright’s related publications


1   Nikhilesh De, South Korean Crypto Exchange Coinzest is Looking To Take Back Cryptocurrencies Accidentally Sent to Clients in an Airdrop,,, 21 January 2019.

3   Paragraph 126.

4   2007] EWHC 971, at paragraph 19.

5   Idem, at paragraph 20.

6   Idem, at paragraph 64.

7   Idem, at paragraph 65.

8   Idem, at paragraph 67

9 Idem, at paragraph 68.

10   Chwee Kin Keong and Others v Pte Ltd [2005] 2 LRC 28 at paragraphs 134 and 136 (High Court, Singapore).

11   Paragraph 206.

12   Paragraph 82.

13   Paragraphs 208 – 211.

14   [1965] 1 AC 1175 at 1248.

15   B2C2 Ltd v Quoine Pte Ltd [2019] SGHC(I) 3 (Quoine), at paragraph 256.

16   Milangos v George Frank [1976] AC 443.

17   For more information on whether a cryptocurrency can be a currency, see our briefing on Deciphering Cryptocurrencies.

18   [2018] EWHC 2596.

19   See Robertson v. Persons Unknown, CL-2019-000444, English High Court, 15 July 2019, Moulder J, for a recent decision dealing with some of these issues on an ex parte application.

Recent publications

Subscribe and stay up to date with the latest legal news, information and events...