Korean Court Absolves Bithumb In Lawsuit Over $355k Hacking Incident

Earlier this week, a South Korean court absolved Bithumb, which was blamed by a customer for enabling hackers to take his money and crypto holdings by fraudsters.

The security infringement brought about a cryptocurrency robbery worth nearly 400 million Korean won ($355,000). A client of the world’s biggest cryptocurrency exchange, Ahn Park, asserted that on 30 November 2017, Bithumb’s absence of security enabled swindlers to deplete his record, except for a couple of cents, even after prior hacking resulted in an expansion of security.

The hacker figured out how to control Park’s record for a couple of hours, however was all that could possibly be needed to supplant Ethereum with all cash balances.

It is hazy precisely how the criminals accessed the individual information of Park, however the claim recommends that he could be one of the 31,000 clients of Bithumb who saw their record records got to by means of the home PC of a company’s representative—which later prompted cryptocurrency theft through phishing attcks.

The legal action is based on the fact that Bithumb was previously compromised and alleges that there are critical problems with the servers of the exchange that have not yet been resolved. The lawsuit also raised questions about exchange obligations and whether they could be held responsible for security breaches in order to fulfill their fiduciary obligations.

The exchange based in Seoul defended itself and contended that it has no need to compensate since it’s anything but a financial institution or an electronic financial support network. At last, the court absolved Bithumb of charges identified with the supposed burglary and concurred that Bithumb was not a financial organization.

The judge also said that Bithumb had sufficiently fulfilled its fiduciary duty to Park by sending him 10 SMS messages to alert him about the hacker’s ETH transactions.

He added that cryptocurrency is “mainly used as speculative means, so it cannot be regarded as an electronic means of payment.”

A Financial Supervisory Commission official was previously quoted saying the same thing when Bithumb faced another class action lawsuit on issues arising from its server outage on 12 November.

He stated that there are many speculative factors and crimes such as receipt of similar and hacking are continuing. “Virtual currency is not financial money nor financial investment products at present. The government says you should do it at your own risk, even if you do not recommend the transaction,” the FSA representative adds.

About 3,000 complainants seek unspecified damages and compensation for legal fees and class status certification. Bithumb said at the time that it was still discussing how he would reimburse users, apologizing for the losses and saying that the exchange “will fulfill its legal and social responsibilities with regard to this issue.”

The crypto exchange said that many speculative factors and crimes, such as receiving similar things and hacking, continue. The lawsuit document also states that one of the main reasons for the claim is that Bithumb had previously been hacked in June.