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.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is a MetaMask Wallet? (And How to Use it - Animated)
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.