Court Says Bithumb Doesn’t Have To Compensate User For Crypto Stolen In Exchange Hack

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December 28, 2018 12:06 AM

The court ruled that the exchange was not subject to the Electronic Financial Transactions Act.

South Korean cryptocurrency exchange Bithumb was cleared of all charges brought against it by a customer whose virtual currency was stolen in a November 2017 hack, according to reports out of South Korea.

An article in the Korea Economic Daily states that the lawsuit was brought against the exchange by a customer named Park. Mr. Park claimed that security regulations for the virtual currency exchange were not strong enough to protect investors, leading to his account being hacked and 478 million Korean won being stolen from his account on Bithumb.

According to Park, in November of last year, he deposited 478 million Korean won ($426,244.55) into his Bithumb wallet. Later that same month, he claims an unknown hacker gained access to his account and used the won to purchase Ether and make four transfers out of the account with Bithumb’s approval, leaving Mr. Parks with a measly 121 won ($0.11).

At the heart of the case was the question of whether cryptocurrency exchanges should be subject to the country’s Electronic Financial Transactions Act, which is meant, in part, to “contribute to ensuring the security and reliability of electronic financial transactions by clarifying their legal relations.”

The South Korean court ruled that Bithumb did not fall under the act as it does not qualify as a financial company – that’s because the court views digital currency as a speculative investment rather than an electronic payment system. Thus, it ruled the exchange not responsible for Mr. Park’s stolen funds.

Translations by Google.

Nathan Graham is a full-time staff writer for ETHNews. He lives in Sparks, Nevada, with his wife, Beth, and dog, Kyia. Nathan has a passion for new technology, grant writing, and short stories. He spends his time rafting the American River, playing video games, and writing.

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