South Korea’s court rules in favor of a crypto exchange after a user filed lawsuit

December 27, 2018
Chris Wheal

In another notable hearing in a South Korean court, the judge ruled in favor of a crypto exchange and not a user. A former user — a 30-year-old civil servant Ahn Park – alleged that he fell a victim to a hack attack that occurred to his exchange account, which led to him losing $355,000 as a result. According to Park, shortly after he has registered on an exchange, and deposited the funds into his wallet, they were withdrawn by an unknown individual, and exchanged for Ethereum, shortly afterwards disappearing from the account, leaving only about 11 cents in his wallet. According to the exchange, they sent 10 consecutive SMS messages to Park, reporting the activity, however, since he failed to respond, “it was impossible to determine whether or not the activity was authorized.”

korea court bitcoin

Park has built its case around the allegation that Bithumb – the sued Korean crypto exchange – has failed to provide proper security services, as any “financial services” company should do. However, the judge has ruled that due to the fact that

“cryptocurrencies are not generally used to purchase goods and services and used mostly for speculative means, it is not reasonable to apply the Korea’s Electronic Financial Transactions Act to a defendant who brokers virtual currency transactions without the permission of South Korean regulator, the Financial Services Commission.”

Just earlier this month, Bithumb had to deny yet another allegations. In this case, for “artificially inflating its trade volumes.” The crypto exchange was accused by ratings and analytics service CER of using “wash-trading” to fake 94 percent of its trade volume in late summer of 2018.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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