Court orders South Korea’s largest cryptocurrency exchange, Bithumb, to pay damages to customers affected by an outage that occurred during the Bitcoin rally of 2017.
The court has ordered a reimbursement of over $200 million to the affected investors.
Reimbursement To Affected Investors
According to a report by the Yonhap News Agency, the Seoul Central District Court issued the ruling, stating that Bithumb failed to properly manage its servers and systems, resulting in the outage that prevented customers from accessing their accounts and trading on the platform.
The ruling stated that Bithumb must pay damages to customers who were unable to access their accounts or trade on the platform during the outage, which lasted for several days.
The exact amount of damages has not been disclosed, but it is expected to be substantial given the high value of bitcoin during the 2017 rally.
The court ordered a reimbursement fee of over $200 million to investors who suffered from this outage issue in the company.
Also read:This was after investors complained vehemently to the court about this outage that caused them huge financial losses.
In a statement, a spokesperson for Bithumb said the company is disappointed by the ruling and plans to appeal the decision.
The spokesperson stated that the firm understands the frustration and inconvenience that our customers experienced during the outage, and apologized for any harm that was caused; However, they believe that this ruling is unjust and plan to appeal the decision to a higher court.
Need For Proper Management In Crypto Firms
This case is a reminder of the importance of proper management and maintenance of servers and systems for cryptocurrency exchanges, especially during periods of high volatility and heavy trading activity.
This is a cause of concern for many in the crypto industry as many small exchanges might not have the resources to keep up with the technical demands and potential security risks.
The incident in 2017 was not the only one to happen in Bithumb, in 2019, the exchange suffered a hack that resulted in the loss of over $13 million worth of various cryptocurrencies.
The company promised to reimburse affected customers but it is not clear if it was fully accomplished.
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