Court rules in favor of South Korea-based Bithumb in $355,000 hacking case
In an interesting development which seems to be straight out of a John Grisham courtroom drama, a South Korean court has ruled in favor of the crypto exchange Bithumb which was sued by a user, who alleged that he was hacked $355,000, according to a report by CoinDesk.
Citing the court documents, the report says that the user Ahn Park had placed nearly 400 million Korean won in his account with Bithumb on November 30, 2017, and in a matter of hours some hacker logged into his account and replaced the cash with Ethereum. And over the same period of time the exchange allowed transactions out of his wallet and the end of it Ahn was left with cryptos worth 121 won and less than a dollar in cash.
This series of events led Won to the Civil Court where he filed a complaint against the Bithumb’s parent firm, Bitsy Korea.com.
“Considering that Bithumb offers similar services to the financial sector, it requires a high degree of security measures required by financial institutions.”
That was not all, Ahn also complained a major breach on part of the exchange in April 2017, in which many users lost their personal data because of malicious code on the platform. He argued that the exchange failed to live up to its fiduciary obligations and he was let down by the exchange.
The exchange defended itself vehemently and in its argument, it said, “According to the Electronic Financial Transactions Act, Bithumb is not responsible for compensation because it is not a financial company, an electronic financier, or an electronic financial assistant. … Since we have strengthened our security policy since the leak of personal information, we have fulfilled our obligation to be an observer.”
Ultimately, after hearing both sides of the story, the judge ruled in favor of Bithumb and agreed that the Electronic Financial Transactions Act does not apply to the exchange, and added that cryptocurrency is “mainly used as speculative means, so it cannot be regarded as an electronic means of payment.”
The court also said that the exchange fulfilled its fiduciary obligations by sending 10 SMS messages to Ahn to alert him of the suspicious fund transfer being carried out by the hacker.
In another development last week, the South Korean cryptocurrency exchange faced charges of faking trade volume, to show a higher reported value. The exchange denied any wrongdoing. CER accused Bithumb of “wash trading,” a form of market manipulation where large amounts of crypto are moved by the same entity back and forth to show an increase in trade volume.
Image via Shutterstock
Join our Telegram group