The Court Declares that a Cryptocurrency Exchange Housed in a Fraudster’s Wallet is ‘not Responsible for the Victim’s Losses

A South Korean judge found that the native cryptocurrency exchange is not responsible for the activities of a vocal hacking fraud ring that transported its customers’ coins onto its network.



As per Newsis, a person identified only as ‘B’ for official purposes is alleged to be a sufferer of a fraudulent operation. The situation was handled in the Seoul Central District Court’s Civil Settlement Division.



B’s attorneys stated that B and at least ten other co-plaintiffs were victims of a speech hacking scam in which fraudsters convinced victims to transmit bitcoin to the ring’s account. The (unnamed) exchange housed the wallet.



After then, the assets were removed from the exchange’s network. Members of the ring pretended to be government investigators, financial organization personnel, savings bank staff, and credit card issuer agents.



When the hoax was discovered, the ring’s account was banned, labeled as an account linked to voice hacking, and all payments and transactions were stopped.



However, B and the other plaintiffs contended that the company should pay them for their losses. 



The company, they said, failed to “handle and monitor” the account. The victims’ attorneys claimed that the transaction enabled the ring to exploit its system.



The exchange denied the claims, stating that all the cash saved in the wallet had been removed, leaving nothing to repay. It further argued that it was not responsible for losses because it had fulfilled all of the necessary procedures.



The court concluded that the company had “no responsibility” to satisfy the sufferers’ demands. It also said it was “impossible to believe” that the exchange was “grossly negligent” in the situation.



According to the presiding court, “the audio hacking scammers violated [the exchange’s] economic structure.” It’s impossible to assume that [the exchange] established its business strategy to aid or encourage voice phishing crimes.”



According to South Korean legislation, civil legal battles in South Korea can be appealed to the High Court within 14 days of a judgment.



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