South Korea Court Acquits Bithumb In Crypto Exchange Hack After Investor Filed Lawsuit Over $355K Hack

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South Korea Court Acquits Bithumb In Crypto Exchange Hack After Investor Filed Lawsuit Over $355K Hack

The leading media Korea Economic Daily has reported of Bithumb receiving a green signal from South Korean court from an allegation of hacking. One of the Bithumb clients earlier accused the platform of being involved in the hacking incident following which the customer loses thousands of dollars.

The lawsuit was initiated by 30 years old Ahn Park who accused the exchange of hacking its account on November 30 last year. The customer has reportedly accused the exchange of having shared the data with hackers which eventually led to the stealing of around $355,000 from his account.

According to a complaint filed by Park, Bithumb inability to place the right security measure has led unidentified hackers to access his cryptocurrency account and withdraw the funds leaving a few cents. It has come to light that the hackers were able to gain access to the customer’s account for a few hours in which they were able to use the cash holding of Park to buy Ethereum and transfer the tokens to separate wallets that were originally owned by the hackers. The hackers reportedly left in his account Ethereum worth of 121 won (11 cents).

bithumb hacking

The most crucial incident of the entire event is that the security of the exchange was compromised prior to hackers gaining access to Park’s account. The incidents of breach of security at Bithumb have been in news in the past as well. Last year in July, the hackers were able to gain access to private information of nearly 30,000 users of the exchange as well as to its employee records. Park accused the exchange of failing to fix the issues that have lead to hacking in the past making it easy for the hackers to gain access to his account.

Just like that of Korean exchange’s services, Park has requested Bithumb to follow a similar security requirement which is widely applicable to financial service providers. In defense, Bithumb stated that it in no way is liable for any kind of compensation as the exchange is not an electronic financier, an electronic financial assistant or a financial firm. The court, however, has backed the argument of the exchange and has cleared it of any charge pertaining to hacking and theft. The court agreed to the Bithumb claim of it not being a financial firm which frees it from the obligations and regulations.

The judge of the court also stated that Bithumb did carry out its fiduciary duty by sending as many as 10 SMS notifying him of the transaction. He further added that cryptocurrency is widely used as an experimental means; therefore, it cannot be regarded as an electronic means of payment.

The ruling, however, has raised concerns on the dangerous future of the misuse of cryptocurrency investors. The investors mulling or already having invested in the cryptocurrency are on their toes as there is no legal way to protect their assets from the hackers. The ruling, nevertheless, has brought a sigh of relief to the exchange if not to the crypto investor.