Seoul Central District Court

South Korean Court Orders Bithumb to Compensate Users for an 'Accidental' BTC Withdrawal Case in 2018

A South Korean court ordered one of the biggest domestic crypto exchanges to compensate victims of an “accidental withdrawal” incident in 2018. Bithumb has been ordered to pay customers who withdrew their bitcoin funds to an unknown wallet.

Funds Ended Up in a Wallet With an Unknown Owner

According to Fn News, six Bithumb customers brought the case before the 15th Division of the Civil Agreement of the Seoul Central District Court. They alleged that the exchange provided them with misinformation regarding withdrawing funds in November 2018.

Due to the alleged chain of errors, users sent the bitcoin (BTC) to an unknown wallet. Victims wanted to transfer their cryptos from the Bithumb wallet to a third-party one through a function offered by the exchange.

But per Judge Min Seong-cheol, the operation went wrong, as Bithumb’s system didn’t transfer the funds to the third-party wallet. In reality, their funds ended in a wallet whose owner’s identity is still unknown, according to the Seoul court.

Victims alleged that Bithumb’s customer service told them the exchange did nothing wrong, although the company was well aware that there has been a mistake.

The case gathered popularity across the country thanks to a video posted on Youtube. South Korean IT community rapidly made the video viral because of the faults spotted on the video published by the victims.

Victims Compensation Sparks Controversy

Judge Min commented during the trial:

It is difficult to say that the defendant has fulfilled its precautionary obligations under the paid lease contract, such as not fulfilling the duty to verify the identity of the withdrawal address requested by the plaintiffs and the withdrawal address transmitted to the defendant server.

Initially, victims sought $1 million in compensation, but the judge determined to compensate at the bitcoin rate on the date the incident happened ($4,550 – $4,650 approx). This decision created controversy amongst the victims, taking into consideration the current bitcoin prices nowadays.

As of press time, Bithumb hasn’t issued a public comment about the court’s decision.

What do you think about the court’s decision? Let us know in the comments section below.

South Korean Police Seize Shares From Major Bithumb Shareholder

South Korean police have seized shares in Bithumb, the country’s biggest crypto exchange. The shares belong to Bithumb Korea director and major shareholder Kim Byung-Geon.

According to a local media report, the police raid – the third on the exchange this month – follows a September 14 ruling from the Seoul Central District Court.

The seizure was executed on September 16 at Bithumb’s Gangnam office by accounting firm Samjong KPMG, which will also shortlist additional shareholdings to be sold in Bithumb Holdings. The accountants are overseeing the sale of the exchange.

It is not clear how much of Kim Byung-Geon’s stake was confiscated. However, the director has been trying to acquire Bithumb without success. He has reportedly been sued in the process, while also filing an application for the confiscation of Lee Jung-Hoon’s stake, Bithumb chairman and majority shareholder.

Bithumb is currently under investigation for financial fraud involving $25 million. The exchange was raided twice this September in connection with the fraud case, which relates to the private sale of Bithumb’s native token, Blockchain Exchange Alliance (BXA), in 2018.

The tokens were never listed on the Bithumb platform as promised by the company, resulting in investors reportedly suffering losses to the tune of $25 million.

What do you think about the successive police raids at Bithumb? Let us know in the comments section below.

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