Bithumb to compensate victims of Bitcoin withdrawal mishap with $1.1 b following Seoul court’s ruling

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Seoul’s Central District Court ruled that Bithumb, a South Korean crypto-exchange, was liable to compensate the victims of Bithumb’s withdrawal in November 2018. In that incident, some users lost their bitcoins trying to transfer their funds to another wallet or exchange.

At the time, six Bithumb users, including lead plaintiff Lee Mo, demanded the withdrawal of funds from Bithumb, after which a mistake on the exchange part resulted in the transfer of Bitcoin users’ holdings to another address. The identity of the owner of the ‘other address’ where the funds were wrongly transferred remains unknown.

The incident led to the initiation of a civil case against Bithumb, in which the plaintiffs requested that they be properly compensated for the resulting damages.

The decision of today’s Director Judge Min Seong-cheol ruled that Bithumb should pay the affected users 1,1 billion won ($996,332) for the damages in question. Lee Mo and five other plaintiffs argued that special damages incurred by this incident should be remembered. At the time, the price of one bitcoin was 5,159,000 won ($4,673), while the same value was roughly 21 million won ($19,000) at the end of the legal proceedings.

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However, the Court has ruled that the amount of compensation should be assessed on the basis of the closing price on the day of the accident.

Seo Ki-won, a lawyer with Dong-in, who represented the plaintiffs,

“There have been several mis-withdrawal accidents on cryptocurrency exchanges. Most exchanges have not been liable for their responsibilities.”

According to him, this is the first instance in which an exchange is judged to be liable to pay compensation for allegations of this sort.

Bithumb had previously been acquitted by the South Korean court in another investor case brought in 2018. In that case, the court ruled in Bithumb’s favour, after the plaintiff sued an exchange for a $355,000 loss of money in a hack.

South Korea’s highest crypto-exchange target was two hacks in 2018 and 2019, with a total of $51 million in stolen funds.

 

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