Bigthumb to pay investors compensation for power outage
2023.01.16 08:43
Bigthumb to pay investors compensation for power outage
By Tiffany Smith
Budrigannews.com – The Bithumb cryptocurrency exchange’s ongoing saga continues, this time with a ruling from local courts.
The South Korean Supreme Court concluded on January 13 that the exchange must compensate investors for a 1.5-hour service outage that occurred on November 12, 2017. A local news source claims that the damages amount to $202,400, or 251.4 million won in the local currency.
A district initially decided against the investors, but it was later overturned. The Supreme Court’s final decision mandated that the 132 investors involved receive damages ranging from as little as $6 to approximately $6,400.
In its final decision, the court stated:
“The service operator, not the service users who pay commission for the service, should bear the burden or cost of technological failures.”
The country’s largest cryptocurrency exchange is Bithumb. Investors seeking compensation claimed that bottled-necked transaction flows and a sudden double-digit increase in the average number of orders per hour caused the temporary outage. During the outage, Bitcoin Cash (BCH) and Ethereum Classic (ETC) suffered significant declines.
Local authorities have been keeping a close eye on Bithumb prior to this decision. Regulators are now looking into Bithumb following investigations into the exchange’s former chair and the sudden death of one of the largest shareholders following allegations of embezzlement.
The country’s National Tax Service (NTS) is conducting a “special tax investigation” into the matter. On January 10, the headquarters of Bithumb were searched by authorities, who are looking into possible tax evasion.
The local crypto scene appears to be being targeted by South Korean regulators. The country started looking into cryptocurrency exchanges for listing native tokens in November 2022.
Following the FTX scandal, the city of Busan in South Korea announced that it would no longer include global cryptocurrency exchanges in its plans to accept third-party digital exchanges.
