South Korean Court Told Bithumb To Pay Investors Damages
Local courts have decided that Bithumb must pay just over $200,000 in damages to the 132 investors who sued the cryptocurrency exchange.
The story of the South Korean cryptocurrency exchange Bithumb keeps going. This time, local courts have made a decision.
On January 13, the South Korean Supreme Court decided that the exchange must pay investors for a service outage that lasted for 1.5 hours on November 12, 2017. A local news source says that the damage costs $202,400, which is the same as 251.4 million won, the local currency.
At first, a court ruled against the investors, but that decision was later changed. The Supreme Court’s final decision said that the 132 investors involved would have to pay damages that ranged from as little as $6 to around $6,400.
In its final decision, the court said:
“The burden or the cost of technological failures should be shouldered by the service operator, not [the] service users who pay commission for the service.”
Bithumb is the largest cryptocurrency exchange in the country. The temporary outage happened because the average number of orders per hour doubled all of a sudden. It slowed down the flow of transactions.
Before this ruling, local authorities had been closely monitoring Bithumb. After looking into the former chair of the exchange and the sudden death of one of the most significant shareholders, accused of embezzling money, regulators are now looking into Bithumb.
The National Tax Service of the country is doing the investigation. It is a “special tax investigation” (NTS). The government was looking into the possibility of tax evasion and raided Bithumb’s offices on January 10.
South Korean government officials are cracking down on the crypto scene there. In November 2022, the country started looking into cryptocurrency exchanges that listed its tokens.
After the FTX scandal, the South Korean city of Busan said it would no longer let third-party digital exchanges from around the world join its network.
