The ongoing saga of the South Korean cryptocurrency exchange Bithumb continues, this time with ruling from local courts.
On Jan. 13 the South Korean Supreme Court finalized its ruling that the exchange must pay damages to investors over a 1.5-hour service outage on Nov. 12, 2017. According to a local news source, the damages are equivalent to $202, 400 – or 251.4 million in the regional currency won.
Initially, a district ruled against the investors, though it was later overturned. The finalized ruling from the Supreme Court ordered damages to be paid ranging from as little as $6 to around $6,400 to the 132 investors involved.
The court’s final ruling stated that:
“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 country’s largest cryptocurrency exchange. The temporary outage came after the average amount of orders per hour suddenly doubled and bottled-necked transaction flows
Prior to this ruling, Bithumb has been under tight watch from local authorities. After investigations on the former chair of the exchange and the sudden death of one of the largest shareholders after embezzlement claims, Bithumb is now being probed by regulators.
The investigation is a “special tax investigation” being conducted by the country’s National Tax Service (NTS). Authorities are exploring possibilities of tax evasion and raided Bithumb headquarters on Jan. 10.
Regulators in South Korea appear to be cracking down on the local crypto scene. Back in November of 2022, the country began investigations on cryptocurrency exchanges for listing native tokens.
After the FTX scandal, the South Korean city of Busan announced that it is dropping global crypto exchanges from its plans of onboarding third-party digital exchanges.
Author: Savannah Fortis