Bithumb has been acquitted by a South Korean court, after an angry investor tried to sue the exchange after his account was allegedly hacked back in November 2017. In the alleged hack, the investor lost around $355,000, as a hacker traded his fiat deposits into Ethereum then into an unknown wallet off the exchange. The investor blamed the exchange’s poor security for his losses, however the courts decided to take Bithumb’s side.
Losses Stemming from a Previous Hack
Bithumb hasn’t had the best run of things when it comes to security. Back in October 2017, it suffered a data breach where more than 30,000 of its user’s details were compromised. However, the exchange informed all of its users – even those not affected by the data breach – to change their passwords and update their two-factor authentication (2fa). It’s this data breach that disgruntled investor Ahn Park used as ammunition, as he claims that it is this that has caused his funds to be stolen.
Multiple Warning Messages
As per standard operating procedures, Bithumb sent Park a series of text messages informing him of the various trades and transactions to an off-exchange wallet via his account. Park denies that he ever received these messages. The court record shows the Bithumb successfully sent these messages, meaning that Park is either making false claims about not receiving messages, or his personal information was not up to date.
Bithumb Hit by Hackers Once More
In June 2018, Bithumb was the victim of yet another hack that saw more than $30 million stolen from investors accounts. Bithumb managed to repay investors that lost their funds and it cut the total loss down to a sizeable $17 million. After the exchange was cleared by local regulators, it began accepting deposits and trading could resume. Park was hoping to capitalize on this second hack as proof of Bithumb’s lack of security to try and win his case.
Celebrating its Birthday in Style
Finally back on its feet and operating again, Bithumb decided to celebrate its birthday in style. In commemoration of its 5th birthday, Bithumb gave away more than 15 BTC worth of various cryptos to lucky traders that had the most trade volume. However, in hindsight this could have been a genius tactic to skirt round wash trading cryptos in order to boost its trade volume levels to become a higher ranked crypto exchange.
The court took the side of Bithumb in this case, and it’s looking likely that Park staged the whole thing after his Ethereum investment fell short amidst the raging bear market. Sadly, all this case has done is drag Bithumb’s name through the mud all over again.