South Korean cryptocurrency exchange Bithumb has fled without responsibility following a legal action brought by a victim of a $ 335,000 trick on the platform, in a historical sentence for the cryptocurrency industry, The Korean economic daily reported.
Bithumb user Ahn Park brought the action against Bithumb after losing 400 million KRW ($ 335,000) from his account on the same day he opened an account with Bithumb.
The funds were withdrawn from his account in a few hours and traded with ETH, which was then sent to another portfolio address through four separate transactions. When Ahn returned to his account, he remained about $ 0.11.
Ahn raised an action in the civil courts of South Korea for the recovery of funds, suggesting that Bithumb had similar obligations to its users as banks and other financial services companies. He said, "Considering that Bithumb offers similar services to the financial sector, it requires a high degree of security measures required by financial institutions."
However, in a ruling that would cause concern for cryptic investors, the court disagreed, and held that Bithumb was not responsible for compensation in this case.
By defending, the exchange said it was not responsible because it was not a financial company within the definition of the law on electronic financial transactions.
"According to the Electronic Financial Transactions Act, Bithumb is not responsible for compensation as it is not a financial company, an electronic financier or an electronic financial assistant," Bithumb told the court. "Since we have strengthened our security policy after the leak of personal information, we have fulfilled our obligation to be observers."
The judge agreed with this position, stating that the cryptocurrency was "used primarily as a speculative medium, so it can not be considered an electronic means of payment".
Despite a high profile data breach in April 2017, the judge said there was no evidence that Ahn Park was affected by this violation and that its data may have been compromised in other circumstances, for example through a phishing scam. .
The case will be good news for cryptographic exchanges, which now have a further precedent for the backup that refuses to pay compensation to customers after their funds have been hacked. For encrypted investors, it is a glaring reminder of the need for vigilance in avoiding cryptocurrency frauds.