Bithumb recently got acquitted of all charges filed in a lawsuit in which an investor had sued the company for his loss of around $355,000 during a hack in November, 2017. 

Local financial newspaper The Korea Economic Daily reported on the outcome on December 24, 2018

The lawsuit

The lawsuit was filed by Ahn Parkm, a 30-year-old investor, who alleged he had been the victim of a hack of his Bithumb account on Nov. 30, 2017.  Mr. Park reported to have his deposit to Bithumb account hacked and the whole amount was converted to Ethereum. The fund was then withdrawn from his account in four different transactions, leaving only 121 won (around 11 cents).

In his claim, Mr Park alleged that Bithumb had failed to offer “adequate” security safeguards to its responsibilities as a purported “financial services” company.  The claimant said that cybercriminals could have acquired his personal information in an October 2017 security breach, wherein hackers gained access to sensitive personal and financial data of over 30,000 Bithumb users.

Park also argued that Bithumb’s activities as a crypto exchange are similar in kind to services offered in the financial sector, and should thus fall subject to the security requirements that apply to electronic commerce transaction brokers.

The decision

The judge however, ruled against this argument, stating that:

“In general, virtual currencies cannot be used to buy goods and it is difficult to guarantee their exchange for cash because their value is very volatile. [Cryptocurrencies] are mainly used for speculative means, [and it] is not reasonable to apply [Korea’s] Electronic Financial Transactions Act to a defendant who brokers virtual currency transactions without the permission of [South Korean regulator] the Financial Services Commission.”

The Hack

In June, Bithumb suffered a high-profile hack in which around $30 million worth of eleven various cryptocurrencies were estimated to have been stolen; the exchange soon stemmed the damage with the assistance of industry counterparts, reducing the figure to $17 million.

Earlier this month, Bithumb was prompted to deny allegations of artificially inflating its trade volumes, after crypto exchange ratings and analytics service CER had accused the platform of using wash-trading to fake to 94 percent of its trade volume as of late summer 2018.

As of press time, Bithumb does not feature in CoinMarketCap (CMC)’s rankings for crypto exchanges by adjusted volume, but comes top in CMC’s separate rankings based on self-reported statistics, claiming $1,617,305,865 in traded volume over the 24 hours before press time.