The legal ramifications of blockchain-based smart contracts : a comparative analysis of B2C2 Ltd v. Quoine Pte Ltd

Abstract

Blockchain technology and other forms of distributed ledger technologies, may still be deemed to be in their early developmental stage. The case of B2C2 Ltd v. Quoine Pte Ltd has shown how smart contracts, a central aspect of blockchain technology, are utilized in transactions on a daily basis and though they solve a number of problems, they also bring with them other challenges. Among the challenges that require to be overcome, there are legal questions relating to whether legal remedies are available to parties of a contract which utilise smart contract technology. This dissertation seeks to identify some of the most pressing issues brought about by these type of contract arrangements. Following the analysis of the judgment delivered by the International Commercial Court of Singapore, a comparative overview is done between the judgment delivered by the court, being a common law jurisdiction, and the applicable doctrine of contract law under the civil law tradition. Through the detailed analysis of the court judgment, the dissertation seeks to examine the problems arising from the contractual relationship between B2C2 and Quoine. Both parties are electronic market makers and whose contractual relationship relates to the trading of two cryptocurrencies, Bitcoin and Ether, on a centralized exchange platform. Certain trade orders are subject to a dispute between the parties, following their execution. The dispute results from an incident which led to certain trading orders to be executed at a rate far off from the real market rate at the time. Through the legal comparative analysis, one may understand better the court’s reasoning in delivering the judgment of the case, the historical common law background leading for such a decision and the consequences such a decision will possibly have on the adoption of similar smart contracting arrangements. The conclusions pinpoint some crucial observations. One of them is that the contract law doctrine under a civil law system might prove to be more holistic and appropriate in its approach to comprehend the novelty that is associated with blockchain-based smart contracts.