A bitcoin seller who transferred S$320,000 worth of bitcoin to a buyer got a rude shock when the buyer was allowed to walk off without paying for the bitcoin.
Christofle Rio, who runs cryptocurrency trading business GCXpress Commerce was contacted on 1 Dec 2020 by Malcolm Tan, head of digital assets company Qrypt Technologies.
Earlier that day, Tan had received a message on Telegram by someone identified as “Kenneth”.
“Kenneth” asked to buy S$320,000 worth of bitcoin.
Tan got in touch with Rio, who said that he was willing to sell that amount of bitcoin.
Acting as the middleman for the transaction, Tan set up a meeting between Rio and “Kenneth” at his Spottiswoode Park office.
At around 4pm that day, “Kenneth” arrived at the office with two other men – Eric Foo and Chua Hong You.
They had brought with them a bag of cash.
Tan requested that “Kenneth” show him his ID to verify his identity, however “Kenneth” refused.
Eric Chua provided his ID instead and Tan accepted it.
“Kenneth” emphasised that all correspondence between them should be by Telegram chat.
Around half an hour later, Rio arrived at the office accompanied by a friend Phoon Chee Kong and counting machines.
After the cash was counted, Rio transferred 12.14 bitcoin to a digital wallet address provided by Tan.
Tan, after deducting a 1 percent admin fee, sent 11.982243 bitcoin to the digital wallet address specified in the Telegram chat with “Kenneth”.
The men then waited for around an hour for the transaction to be verified on the bitcoin network – a public ledger which shows all bitcoin transactions made.
Things turned awry after the transaction was confirmed on the bitcoin network.
That’s when Tan claims “Kenneth” deleted the entire Telegram chat message history.
The “Kenneth” in the office denied that he had received any bitcoin in his digital wallet.
It remains uncertain whether the “Kenneth” in the office was the same “Kenneth” from the Telegram chat.
Rio then called the police.
“Kenneth” and the other “buyers” were allowed to leave with their money after police statements were recorded.
Tan sent the admin fee he received earlier to Rio’s GCXpress Commerce digital wallet, and thereafter lodged a police report.
No findings have been made thus far on whether Rio or Tan had been scammed.
Rio sued Tan for breach of contract, demanding the balance of 11.982443 bitcoin (S$315,846.93).
However, the High Court ruled against Rio.
In a ruling delivered last Wed (22 Mar), Justice Lee stated 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.
Justice Lee also suggested that the relevant authority look into whether due diligence in this instance was performed satisfactorily as the identity of the ultimate buyer, “Kenneth”, was never verified.