Home » Canadian Crypto Startup Sues TMX Exchange for $500 Million over Breach of Contract

Canadian Crypto Startup Sues TMX Exchange for $500 Million over Breach of Contract


Canadian cryptocurrency startup Paycase Global Corp. is suing TMX Group for breach of contract. This comes after the Toronto Stock Exchange operator ended their deal to create crypto-related products and services.

The startup is claiming a loss of opportunity, loss of reputation and loss of revenue, and wants $500 million for damages and that the exchange resumes its performance, according to a lawsuit filed in Canada’s Superior Court of Justice on Monday.

A spokesperson for TMX Group said its subsidiary, Shorcan Digital Currency Network, had been collaborating with Paycase “to try to find a viable and mutually-agreeable business solution. We are very disappointed that Paycase has chosen to go this route. TMX disputes the claims made and we plan to defend ourselves vigorously.”

The compensation asked is one of the largest in any cryptocurrency-related lawsuit to date, with past cases having sought as much as $100 million.

The two Toronto-based firms Paycase and TMX, entered into the 10-year contracts for collaboration plus revenue sharing on an OTC crypto brokerage desk and design and administration of data feeds and crypto indexes, as well as the sharing of cryptocurrency-index revenue.

According to the lawsuit, Paycase entered into these contracts on March 21, 2018, with TMX’s subsidiary Shorcan DCN, with plans of launching a TMX OTC desk and data feed in Q2 of that year. TMX would receive a crypto data collection platform and an international network of industry leaders and participants, and Paycase benefited from TMX’s stature and client base, according to the complaint.

At the time, Paycase CEO Joseph Weinberg said Shorcan DCN would be “the first-ever public crypto brokerage desk by an exchange.”

Then on August 31, 2018, TMX added a change to the contract to extend by two weeks a deadline to put together a Statement of Work highlighting services, service levels, consent, and specifications an delivery timelines for the products. Paycase says that it never received such a statement.

‘Board issues’

Peter Conroy, president and chief executive of Shorcan DCN, encouraged Paycase to purchase Shorcan from TMX to bypass “board approval” procedures affecting the progress of the products, alleges the suit.

Sometime in November, Paycase delivered an offer to buy Shorcan DCN to Luc Fortin, the director of Shorcan DCN and Global Head of Training with TMX Group.

Paycase alleges that TMX announced in or around September 25 that Conroy would be transferred to another TMX firm but still listed him publicly as president of Shorcan DCN.

The cryto startup company claims that Fortin controlled the business and operations of Shorcan DCN and started to deconstruct those operations, including firing the two employees hired by Shorcan DCN dedicated to the development, implementation and continued operation of the TMX OTC Desk in the start of December.

On December 6th, the same day of the dismissals, TMX sent Paycase a “Mutual Termination Agreement.” However, Paycase claims nothing happened to justify the termination and that there was no termination for convenience clause in the contract.

Paycase turned down the termination request and asked for a meeting with TMX officials which took place in February this year. At that time, Shorcan had stopped conducting its part of the contract, which Paycase alleges includes an obligation of continuing performance.
No warning of termination was issued by TMX, but it promised that the products would be operational very soon, according to the suit. In the meantime, Paycase held talks regarding its digital strategy with TMX officials and trained TMX employees.

In March of last year, TMX also said that Bank of Montreal would offer banking services as part of the payment and settlement infrastructure of the organization’s OTC Desk, same as the structures adopted by Fidelity, TD Ameritrade, and E*Trade.

Source: https://www.coindesk.com/crypto-startup-sues-toronto-exchange-group-for-500-million-over-soured-deal

About the author

Ezra Ondara

Ezra Ondara

Ezra Ondara is a football fanatic, and betting pundit. He specializes in product reviews and casino/gambling content, with interest in the aviation industry and space science. When he’s not at his desk crafting content, he is watching the English Premier League or space exploration videos on YouTube, or out of town with his family. Ezra values relationships and he’s committed to providing valuable content for readers.

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