Paycase Financial, a cryptocurrency broker, is suing TMX Group, a financial services company, for $500 million after an alleged breach of contract.
The two companies, both based in Toronto, Ontario, began their partnership in March 2018 when they agreed to a 10-year deal to combine TMX’s existing expertise and infrastructure in traditional markets with Paycase’s cryptocurrency services.
“TMX Group today announced that its wholly-owned subsidiary, Shorcan Digital Currency Network (Shorcan DCN) has entered into an agreement with Paycase Financial … to launch a new cryptocurrency brokerage services focused on Bitcoin and Ethereum,” a press release announcing the partnership reads.
The two companies did not seem to have any major issues for the first year or so of their agreement. But on September 23, 2019, Paycase announced a lawsuit it filed with the Ontario Superior Court of Justice, seeking damages of $500 million on the basis that TMX is violating the agreements.
“Paycase Global Corp. has filed … for damages of $500 million in connection with TMX’s purported termination of two 10-year commercial agreements,” according to Paycase’s announcement of the lawsuit. “These agreements were for the joint creation of a crypto brokerage desk and proprietary cryptocurrency data products, in order to provide institutional and retail clients with access to Bitcoin and other cryptocurrencies.”
A Damaged Partnership
“It is unfortunate that we have had to take these steps to enforce our rights, but we are confident in our position and felt we had to go this route to put ourselves in the position we ought to be in,” Joseph Weinberg, Paycase’s co-founder and CEO, told Bitcoin Magazine. “We were very surprised when these ventures were terminated without any notice or reason.”
Weinberg added that “this partnership could have cemented the Paycase/TMX platform as a global leader in the space” and expressed disappointment with this development.
In regards to the possible renewal of the agreement, Weinberg told Bitcoin Magazine that “at this point it is difficult to comment on the partnership going forward.”
For its part, TMX seems to believe that a path forward in the partnership was still being worked on up until the lawsuit was filed.
“Shorcan DCN and Paycase were working together to try to find a viable and mutually-agreeable business solution,” a TMX spokesperson told Bitcoin Magazine. “We are very disappointed that Paycase has chosen to go this route. TMX disputes the claims made and we plan to defend ourselves vigorously.”
$500 Million in Damages
According to Paycase’s release on the suit, it has managed to secure financing from Bentham IMF, a significant funder of commercial litigation. Leveraging a relatively new business model, litigation funders front-load the cost of the legal battle in exchange for a share of the damages awarded.
“Bentham have been incredible partners and have tremendous confidence in our claim,” Weinberg told Bitcoin Magazine. “They went through months of intensive due diligence on all aspects of the case before committing and have a very high success rate in their investments.”
The $500 million sought marks one of the largest civil damages ever pursued in the cryptocurrency industry. Nevertheless, Weinberg is confident that this was an appropriate amount to ask for.
“These are based on conservative, mid-range forecasts we had initially provided and discussed with TMX, and other damages we’ve incurred in connection with the abrupt termination of a major 10-year institutional partnership,” he said. “ Since the announcement of the Paycase/TMX partnership, similar business models have been successfully proven by other companies.”
The post TMX, Paycase Deal for Cryptocurrency Offerings Leads to $500M Lawsuit appeared first on Bitcoin Magazine.
via Bitcoin Magazine https://bitcoinmagazine.com/articles/tmx-paycase-deal-for-cryptocurrency-offerings-leads-to-500m-lawsuit
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