The ongoing saga of the South Korean cryptocurrency exchange Bithumb continues, this time with the local courts ruling.
On Jan. 13, the South Korean Supreme Court finalized its ruling that the exchange must pay damages to investors for 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 won regional currency.
Initially, one district ruled against the investors, though it was later overturned. The final Supreme Court ruling ordered the payment of damages ranging from $6 to around $6,400 to the 132 investors involved.
The court’s final ruling stated that:
“The burden or cost of technological failures must be borne by the service operator, not [the] service users who pay a fee for the service”.
Bithumb is the largest cryptocurrency exchange in the country. The temporary outage came after the average number of orders per hour suddenly doubled and transaction flows became bottlenecked.
Investors seeking compensation claimed that Bitcoin Cash (BCH) and Ethereum Classic (ETC) suffered major drops during the outage.
Related: South Korean court freezes $92 million in assets related to Terra tokens
Prior to this ruling, Bithumb has been under close surveillance by local authorities. After investigations into the former chairman of the exchange and the sudden death of one of the biggest shareholders after allegations of embezzlement, Bithumb is now under investigation by regulators.
The investigation is a “special tax investigation” carried out by the country’s National Tax Service (NTS). Authorities are exploring possibilities for tax evasion and raided Bithumb’s headquarters on January 10.
Regulators in South Korea seem to be cracking down on the local crypto scene. In November 2022, the country launched investigations into cryptocurrency exchanges to list native tokens.
After the FTX scandal, the South Korean city of Busan announced that it will remove global crypto exchanges from its plans to incorporate third-party digital exchanges.
