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Bithumb Ordered to Pay Millions in Damages for Service Outage

Bithumb Ordered to Pay Millions in Damages for Service Outage

In a recent ruling, the South Korean Supreme Court has ordered Bithumb, the country's largest cryptocurrency exchange, to pay damages of a total of 251 million won to investors. The amount is equal to 200.000 US dollars.

In November 2017, a service outage occurred in Bithumb’s network and caused financial damage to many investors.

The incident happened when Bithumb's transaction service was put on hold for around an hour. After the average amount of orders per hour doubled, a bottleneck emerged in transaction flows.

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As a result, cryptocurrencies such as Bitcoin Cash and Ethereum Classic experienced steep price drops.

Over 100 investors filed a damage suit against the operator of Bithumb, claiming that they suffered financial losses due to the service outage. A district court initially ruled against the investors.

However, the ruling was later 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. An appellate is a responsible court for hearing and reviewing appeals from legal cases that have already been heard in other lower courts. The supreme court, which is the highest legal authority over other courts, has now finalized this ruling.

In its decision, the appellate court stated:

The burden or the cost of technological failures should be shouldered by the service operator, not services users who pay commission for the service.

In other Bithumb-related news, the exchange is currently being investigated by regulators as the National Tax Service (NTS) conducts a "special tax investigation" into potential tax evasion.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.



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