An investor who claims to have lost some $400,000 as a result of the negligence of cryptocurrency exchange Bithumb was denied relief in court, according to reports emerging from South Korea.
First reported by Yonhap news agency, the investor, known as Mr. A, had taken Bithumb to court in connection with the losses, which he alleges were the result of a significant data breach at the exchange back in 2017.
However, a judge in the high court refused the case and dismissed liability, after Mr. A failed to sufficiently prove that the negligence of the exchange had caused his losses. Following the ruling, Bithumb will not be required to compensate Mr. A.
According to Mr. A, the losses arose from Korean won stored on the exchange prior to a data breach in 2017. Hackers allegedly gained unlawful access to the won and bought Ethereum tokens with it through the Bithumb exchange, before converting these back into fiat at four separate intervals.
The case against Bithumb was only the latest to have been raised by investors concerned about losses emerging after the 2017 data breach. Earlier this month, two of these claims were dismissed, for $126,000 and $38,000 respectively, while a third was awarded just $5,000 in partial settlement.
The news will be a blow to other investors who have suffered losses arising from the data breach, and a cautionary tale to anyone holding money or digital currency within live exchange accounts.
With fraud and theft rampant in the industry, investors are always urged to use cold storage solutions for holding their funds, and to ensure no funds are left in hot wallets where they can be easily misappropriated by fraudsters and thieves.
For Mr. A, the result appears to be a now non-recoverable loss of $401,000.
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