Bitcoin platform Bitcoin Meester does not have to reimburse fourteen transactions of a customer who made a profit of four thousand percent but were reversed due to a system error, the Amsterdam court has ruled. On February 26 last year, the customer sold the cryptocurrency Hedera to Bitcoin Meester in order to obtain the cryptocurrency Aion. The customer then sold the obtained Aion back to Bitcoin Master for Hedera.
The price at which Bitcoin Meester bought Hedera from the customer was 2.5 to 25 times higher than the price at which the customer bought the same Hedera from Bitcoin Meester almost at the same time. This allowed the customer to make a profit of more than four thousand percent with fourteen transactions within a time frame of about twelve minutes. The transactions were noticed by Bitcoin Meester's system that the customer logged out of his account and reversed the transactions.
When the customer logged in, he saw that all transactions had been reversed and the profit made with them had also disappeared. The customer demanded that Bitcoin Meester refund more than 1.3 million tokens and pay compensation of 43,000 euros for the lost profit. According to Bitcoin Meester, the transactions were reversed because a bug in its system used a much too low buyback price from Hedera in the processing of each transaction.
According to the judge, the bitcoin platform has shown that there was an error in its system whereby it paid the customer a higher purchase price for Hedera than it received from the customer for the same Hedera. Bitcoin Meester stated that she is a broker and only executes a transaction herself after a customer has bought or sold a cryptocurrency. Due to the error in the system, no real transaction was possible, because Bitcoin Meester could not execute the customer's transaction on the cryptocurrency market due to the incorrect price. The judge therefore stated that the bitcoin platform has not acted improperly towards the customer.
The court then looked at whether a separate agreement had been concluded between the two parties for each of the fourteen transactions. "So the question is: could [plaintiff] trust that Bitcoin Meester wanted to buy back the Hedera time and again for a significantly higher price than what she had sold it to him just before?", The judge asked the question, which also noted that it is important here that in this case it was not one transaction, but fourteen similar transactions within twelve minutes.
In addition, the profit in this case was not caused by a price increase, but because Bitcoin Meester was willing time and again to buy back the cryptocurrency for a higher amount than for which it had sold the same currency just before. "The latter is not economically rational," said the judge . He adds that the transactions did not make a price profit, but transaction profit. "This is also exceptional and unusual."
Based on these two aspects, the judge came to the conclusion that the customer could not trust that an agreement was always reached between him and Bitcoin Meester. There is therefore no breach of contract on the part of Bitcoin Master, as claimed by the customer. The customer's claim to return the 1.3 million tokens and to pay damages of 43,000 euros was therefore rejected by the court. However, the customer was sentenced to pay Bitcoin Meester's legal costs, which amount to almost 2,900 euros.