Categories: Ethereum

Court Acquits Bithumb in Hack Case, Says Not a Financial Firm

Click here to view original web page at www.financemagnates.com
Photo: FM Share this article

Earlier this week, a South Korean court has acquitted Bithumb, which was accused by a client of allowing hackers to steal his cash and crypto holdings, in what appears to be an elaborate scheme by fraudsters. The security breaches resulted in the theft of cryptocurrency worth nearly 400 million Korean won ($355,000).

A user of the world’s largest cryptocurrency exchange, Ahn Park, claimed that on November 30, 2017, lack of Bithumb’s security allowed hackers to drain his account, except for a few cents, even after it increased security following an earlier hack.

The hacker managed to control Park’s account for a few hours, but was more than enough to exchange all cash balances for Ethereum.

It is unclear exactly how the thieves gained access to Park’s personal data, but the lawsuit suggests the he could be on of Bithumb’s 31,000 users that saw their accounts records accessed via an employee’s home computer — later resulting in cryptocurrency thefts through phishing attacks.

So, the basis for the legal action stems from the fact that Bithumb was previously compromised, and allege that there are critical issues with the exchange’s servers which still haven’t been fixed.

The lawsuit also raised questions over the obligations of exchanges, and whether they can be held liable for security breaches to live up to their fiduciary duties.

The Seoul-based exchange defended itself and argued that it is not responsible for compensation because it is not a financial company, an electronic financier, or an electronic financial assistant.

Suggested articles

Introducing the FXTM Trader App for Intuitive Mobile TradingGo to article >>

Crypto not legal tender

Ultimately, the court acquitted Bithumb of charges relating to alleged theft and also agreed to its argument that it is not a financial company. The judge also said Bithumb had sufficiently fulfilled its fiduciary duty to Park when it sent him 10 SMS messages to alert him of ETH transactions carried out by the hacker.

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

An official of the country’s Financial Supervisory Commission was previously quoted saying the same meaning when Bithumb was facing another class-action lawsuit over issues stemming from its server outage which went down on November 12.

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.

Around 3,000 plaintiffs are seeking unspecified damages and compensation for legal fees, as well as certification for class-action status. At the time, Bithumb said that it is still discussing how it will move to pay back users, apologizing for the losses and stating that the exchange “will meet its legal and social responsibilities concerning this issue.”

The document corresponding to the lawsuit also states that one of the main reasons for the claim is the fact that Bithumb was previously hacked in June.

cinerama

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Share
Published by
cinerama
Tags: currency eth ether exchange trading

Recent Posts

  • Bitcoin Business

Rumors CFTC Investigating Bitmex Amid Speculation of Market Manipulation

United States’ Commodities and Futures Trading Commission is apparently investigating Bitmex according to unnamed sources. Bloomberg says :“The months-long CFTC… Read More

4 hours ago
  • Bitcoin Business

Bitcoin Mining Helps Oil Companies Reduce Carbon Footprint

Natural gas acquired as a byproduct of oil extraction has become synonymous with wasted energy. In certain areas, drilling companies… Read More

4 hours ago
  • Bitcoin Business

Crypto Exchange BitMEX Under CFTC Investigation Over US Users: Bloomberg

The U.S. Commodity Futures Trading Commission (CFTC) is reportedly probing crypto exchange giant BitMex. | Source: YouTube/BitMEX The US Commodity… Read More

4 hours ago
  • Bitcoin Business

Pro-Bitcoin Ron Paul Agrees with Trump Over ‘Clueless’ Fed

Donald Trump has gained an unlikely ally in delivering criticism against the central bank. | Source: Getty Images/AFP/Shutterstock/AFP; Edited by… Read More

4 hours ago
  • Bitcoin Business

‘Tip Trump’ Meme Targets POTUS While BAT Cryptocurrency Soars 19%

The BAT cryptocurrency gained 19% after its integration onto a gamer streaming site. Meanwhile, a meme was born as Trump… Read More

4 hours ago
  • Bitcoin Business

China’s Blockchain Industry, 2019 – By Separating Crypto-Currencies from the Underlying Blockchain Technology, China’s Government Helped People Focus on Blockchain Solutions for Various Industries – ResearchAndMarkets.com

DUBLIN--( BUSINESS WIRE )--The "China Blockchain Industry" report has been added to ResearchAndMarkets.com's offering.This report provides a complete and detailed… Read More

4 hours ago

This website uses cookies. We use cookies to collect data about your interaction with our website. The main purpose of collecting information with these cookies is to improve your experience with our site. For more information we encourage you to read our privacy policy.

Read More