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Paycase Global Corp., a Canadian crypto startup, has taken legal action against the operator of the Toronto Stock Exchange, TMX Group.
The startup is suing the exchange operator for breach of contract after TMX Group backed out of an agreement to help the startup create crypto related services and products.
Paycase files lawsuit
In the lawsuit against the exchange operator, Paycase has laid many claims including loss of revenue, loss of opportunity, and loss of reputation.
The startup is demanding a settlement of $500 million for the damages it suffered due to TMX Group’s termination of the agreement.
The lawsuit was filed with Canada’s Superior Court of Justice on Monday.
According to a spokesperson for TMX Group, the company’s subsidiary, Shorcan Digital Currency Network, has been engaged in talks with Paycase to try and find a mutually agreeable and viable solution to the problem.
The company is disappointed that Paycase has decided to take the matter to court. TMX plans to defend itself against the accusations, and they dispute the claims being made by Paycase.
The damages being claimed by Paycase are some of the highest that have ever been claimed in a crypto related lawsuit.
The two companies entered into a ten-year agreement for revenue sharing and collaboration on an over the counter crypto brokerage.
The partnership would have seen the firms engage in the creation and management of data feeds, crypto indexes, and the sharing of index revenue.
The papers submitted to the court state that Paycase and Shorcan entered into their contract in March 2018. The crypto startup intended to launch an OTC desk and data feed in Q2 of 2018.
Through the partnership, Paycase would gain access to TMX’s client base and benefit from its reputation. TMX would get a network of market participants and a cryptocurrency data aggregation platform.
Paycase says that TMX extended the deadline for the contract by two weeks on the 31st of August.
The crypto firm alleges that TMX requested this extension to put together a Statement of Work outlining services, service levels, delivery timelines for the products, and consent. Paycase says that it never received the statement from TMX.
Crypto startups and battles with exchanges
Battles between crypto startups and exchanges that back out of agreements are on the rise. Exchanges present startups with opportunities to raise funds through ICO and help them with other business moves.
In many cases, the exchanges do not deliver on their end of the deal and this leaves the startups in a precarious position.
If Paycase wins its case against TMX, it will set a welcome precedent for startups which have fallen victim to exchanges pulling out of deals.