Bitcoin seller loses lawsuit over deal involving $320ki cash

SINGAPORE – A face-to-face transaction to sell $320,000 worth of bitcoin went awry when an argument broke out over who was entitled to the cash after the buyer denied receiving the cryptocurrency, despite the bitcoin network confirmed the transfer.

Christofle Rio, who had transferred 12.14 bitcoins to a digital wallet, eventually left the Tanjong Pagar apartment with no cash and no cryptocurrency.

He then sued Malcolm Tan Chun Chuen, the man who traded with him, for breach of contract for not paying the agreed price.

But Mr Tan argued that his company, Qrypt Technologies, was merely a middleman facilitating the sale of bitcoin from Mr Rio’s company, GCXpress Commerce (GCX), to the actual buyers.

He argued that he cannot be liable, nor does Rio have legal standing to sue, simply because the agreement was not between them as individuals, but between their respective companies.

Rio’s lawsuit was dismissed last Wednesday, after the Supreme Court found that both men were not the proper parties to the contract as they were acting on behalf of their respective companies, and not in their personal capacities.

Mr Rio established GCX in 2019 as a cryptocurrency trading business, while Mr Tan, a disbarred lawyer, was the CEO of Qrypt, a digital asset and blockchain company.

According to Mr Tan, he was contacted on 1 December 2020 via messaging app Telegram by someone identified as “Kenneth”, who asked to buy $300,000 worth of bitcoin.

Tan then contacted Rio, who said he had $320,000 worth of bitcoin to sell. They agreed to carry out the transaction at Mr Tan’s office at 18 Spottiswoode Park Road that afternoon.

Tan then informed Kenneth of the meeting. Kenneth said he would be present in the office with his staff, and emphasized that all communication would be via Telegram.

At 4.10pm, three men, who identified themselves as Kenneth, Eric Foo and Chua Hong You, arrived at Mr Tan’s office. Mr Foo took cash out of a bag and placed it on a table in the room.

Tan asked Kenneth for his identity card to allow Qrypt’s compliance manager to complete checks to comply with Monetary Authority of Singapore regulations.

Kenneth declined and asked Chua to provide his identity card instead. Mr Chua was cleared to proceed with the transaction.

There was some confusion when another buyer emerged, also with $320,000 in cash. The buyers had apparently arranged for him to wait downstairs. He was told to leave the premises.

At about 4.30pm, Mr Rio, accompanied by a Mr Phoon Chee Kong, arrived with counting machines. After the cash was counted, Rio transferred 12.14 bitcoin to the wallet specified by Tan.

Tan then sent 11.982443 bitcoin – after deducting a 1 percent administration fee – to the wallet address provided in the Telegram chat.

However, the verification process took over an hour. Mr Rio and Mr Phoon were stopped by the three buyers from leaving with the cash until the transfer is confirmed.