• South Korea’s Supreme Court has ordered Bithumb, the country’s largest cryptocurrency exchange, to pay damages to more than a hundred customers who suffered financial losses due to the exchange’s service outage in November 2017.
• The court has ordered Bithumb to pay damages totaling 251.4 million won ($203,120) to 132 investors who filed a lawsuit against the exchange following the service outage.
• The appellate court ruled that the burden or cost of technological failures should be shouldered by the service operator, not the service users.
South Korea’s Supreme Court has made a final ruling in a case involving a service outage at Bithumb, the country’s largest cryptocurrency exchange. The court has ordered Bithumb to pay damages totaling 251.4 million won ($203,120) to 132 investors who filed a lawsuit against the exchange following the service outage.
The plaintiffs claimed that they suffered financial losses due to steep price drops in a number of cryptocurrencies, such as bitcoin cash (BCH) and ethereum classic (ETC), on Nov. 12, 2017, when the service outage occurred. According to the lawsuit, during the service interruption, the average number of orders per hour doubled, causing transaction flows to significantly slow down.
A district court initially ruled in favor of Bithumb against the investors. However, the decision was subsequently overturned by an appellate court, which ordered Bithumb to pay damages ranging from 8,000 won to 8 million won to each of the 132 investors. The supreme court upheld this ruling Thursday.
According to the appellate court, 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 ruling serves as a reminder to other exchanges that customer satisfaction and service quality are paramount and that service outages should be avoided at all costs.
The ruling is also expected to add further legitimacy to the cryptocurrency sector in South Korea, which has seen a surge in trading activity in recent months. With the country’s supreme court ruling in favour of the investors, it is likely that the sector will continue to expand as investors become more confident in the industry.