South Korea’s Supreme Court has given a final ruling against virtual currency exchange Bithumb ordering it to pay damages to customers for its ill-fated downtime in 2017.
Local news outlet Yonhap reported that the court ordered Bithumb to pay KRW251.4 million ($202,400) to more than 100 disgruntled investors. Each of the 132 customers will receive between $6.47 to $6,470 as part of the court’s ruling in a case that has dragged on for nearly six years.
A district court ruled in favor of Bithumb on the grounds that the exchange was not liable for the outage at the time. However, the appellate court overturned the ruling, with the Supreme Court putting a final seal to set a new precedent for South Korea’s virtual currency industry.
“The burden or the cost of technological failures should be shouldered by the service operator, not service users who pay commission for the service,” the judgment of the appellate court read.
In 2017, Bithumb suffered a network outage lasting for over 11 hours triggered by a steep increase in average orders per hour, stifling transaction flows. Several customers complained that the outage led to losses as the prices of several virtual currencies like Ethereum Classic and BCH tumbled, triggering a class-action lawsuit.
Bithumb’s network outage occurred in the middle of the BTC historic rally of 2017, with pundits noting that the asset’s price movement might have played a role in a temporary blip.
Bithumb’s woes continue
Bithumb’s rough patch rolled into the new year with the South Korean exchange getting the stick from regulators. Only last week, the exchange came within the crosshairs of the National Tax Service on suspicion of tax evasion, culminating in a raid in the firm’s headquarters.
The new investigation is coming on the heels of the exchange’s former chairman Lee Jung-Hoon surviving a lengthy court battle with prosecutors over a $70 million fraud charge. The court acquitted the former chairman of the charges as the exchange’s executives heaved a sigh of relief.
At the tail end of 2022, Bithumb’s largest shareholder, Park Mo, was found dead in his home in what investigators term suicide. Before his death, Mo was named as the primary suspect for the alleged involvement of misappropriating funds linked to Bithumb’s sister companies.
Bithumb was one of the digital exchanges raided by Korean law enforcement agencies in the wake of Terra’s implosion as they scoured the premises for any evidence of foul play.
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