Exchanges

27/12/18 07:00 UTC-4

South Korean court acquitted Bithumb cryptocurrency exchange

The South Korean court ruled in favor of the Bithumb exchanger after the user's wallet was hacked and stolen for a sum of about $ 355,000, as reported by the CoinDesk news agency.

According to a CoinDesk Korea report on Tuesday (December 25), court documents show that a Bithumb user named Park said that: "(...) On November 30, 2017, he put 478 million Korean won into his account at Bithumb, and within a few hours someone allegedly hacked an online wallet, logged into an account and exchanged money for Ethereum (...) the same day, the Bithumb exchanger allowed all ETH coins to be withdrawn from the wallet in four transactions".

As a result, the only funds left when the user returned to his account were crypto-coins worth 121 won (11 US cents) and less than a dollar in cash. Trying to get his money back, Park filed a lawsuit against Bithumb in the civil court of Seoul.

 

South Korean court and Bithumb

"Given that Bithumb offers financial services involving large sums of money, you need to have a reliable security system (...) and ensure that customer funds remain secure (...)" – from the message on BTCKorea.com

According to the court statement, Park also pointed out a serious violation of his personal information, which occurred in Bithumb in April 2017. He regards this incident as a possible data leak from his account and stated that the exchanger does not comply with its fiduciary obligations to act in the interests of clients.

As a result of the 2017 hacking, thousands of Bithumb customers suffered. The number of fines that the exchange platform would have had to pay amounted to more than 58 million won.

"In accordance with the “Electronic Financial Transactions Act”, Bithumb is not responsible for compensation, as we are not a financial company or electronic financial assistant (...) As we strengthened our security policy after leaking personal information, we have fulfilled our obligation to be a diligent intermediary between the participants of the exchange" – from Bithumb's statement in court.

The judge in charge of the case ultimately endorsed Bithumb, agreeing that the “Electronic Financial TransactionTransaction
– is a financial term that means a logically meaningful operation that can only be carried out completely. Details
Act” does not apply to a cryptocurrency exchange. According to the judge who considered the case, "cryptocurrency is mainly used as a speculative financial means, therefore it cannot be considered as an electronic means of payment".

In addition, the judge said: "It is impossible to prove that the money was stolen through the fault of Bithumb, because the account could have been hacked due to a virus or for some other reason, but due to the client’s own (...) Phone hacking or computer infection".

The South Korean court acquitted the Bithumb crypto-exchange, but due to the incident, more than 7,000 traders left the platform, another 12,000 withdrew significant amounts from their stock wallets.

Editor: Alyona Nabok

See also: "Guidelines of UPbit, the South Korean Stock-Exchange, accused of fraud"

#Bithumb #South Korea #exchange #court #ETH

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