Bithumb a major South Korean exchange has grabbed the attention as it is acquitted by the South Korean court in a lawsuit.
A Bithumb user named Ahn Park had recently sued the exchange platform, alleging that he had been the victim of a hack. He claimed that he’d placed 478 million ‘Korean won’ in his account with Bithumb on Nov. 30, 2017. After a few hours someone presumably a hacker, had logged into his account and exchanged the cash for Ethereum. Further alleged the cryptocurrency was then transferred out of his wallet, in four separate transactions.
According to him, the hack resulted in a loss of 400 million Korean won, or around $355,000, and his account was left with cryptos worth 121 won (11 U.S. cents) and less than a dollar in cash. to reclaim his funds, Park’s case claim that Bithumb had failed to offer security measures, he noted, “Considering that Bithumb offers similar services to the financial sector, it requires a high degree of security measures required by financial institutions.”
Moreover, he marked a major breach of personal information which Bithumb had experienced in 2017 as a possible leak of his account details. Reportedly, in that breach hackers gained access to sensitive personal and financial data of over 30,000 Bithumb users.
On this, Bithumb responded in the court, “According to the Electronic Financial Transactions Act, Bithumb is not responsible for compensation because it is not a financial company, an electronic financier, or an electronic financial assistant. Since we have strengthened our security policy since the leak of personal information, we have fulfilled our obligation to be a diligent manager.”
The court judgement eventually favored Bithumb, agreeing that the Electronic Financial Transactions Act does not apply to the exchange, adding that cryptocurrency is “mainly used as speculative means, so it cannot be regarded as an electronic means of payment.”
About the breach in 2017, the judge stated that it cannot be found out that Park’s data has been lost in the April 2017 data breach suggesting that he might have lost his Bithumb login details via a phishing website, or his cell phone might have been hacked. The court added that Bithumb had in fact sent 10 SMS messages to Park regarding the hacker’s withdrawals to alert him to the fund movements, which must be manually approved by the exchange.