South Korean Court Issues Landmark Decision on Crypto Exchange Hacking

A Korean crypto exchange, Coinone, has been ordered to pay compensation for losses resulting from a hack of a customer account.

According to an account of the case published in IT Chosun, the customer - identified only as Mr. A - joined the exchange in April 2017.

The customer sued for 58 million won in losses, saying that the exchange should have blocked transactions from overseas and that it should have rejected any transfer request of more than 20 million won.

"The exchange has not set minimum safeguards," the plaintiff argued, according to the newspaper.

Coinone, which according to CoinMarketCap data is the world's 70th largest exchange by reported volume, countered that it is not required to block foreign IP addresses.

The court agreed with most of what the exchange argued.

It did not hold Coinone responsible for the hack itself, and it said that the exchange did not have to police transactions by IP address.

The court did say that the transfer limits need to be followed, as the 20 million won cap was set not only to prevent money laundering but also to protect customers from exchange failures.

"It is a mistake for the exchange to fail to meet the daily withdrawal limit," IT Chosun quoted the court as saying.

While the customer only received partial compensation, the Korean press reports that the award is a first and that the decision suggests that exchanges can now be held responsible for some losses.