The Seoul District Court made an unprecedented ruling in favor of investors who lost their virtual assets in a hacking incident at crypto exchange Coinrail.
Fast facts
- On Wednesday, the court ruled that Linus Co., the operator of the Coinrail exchange, needs to pay the plaintiffs 380 million Korean won (about US$320,000). The plaintiffs, consisting of 11 former users of the Coinrail exchange, filed the lawsuit in September 2018 to claim damages for a hacking incident earlier that year that lost crypto worth more than US$40 million. The stolen crypto tokens included Ethereum, FundX and Aston.
- Coinrail closed down soon after the hacking incident took place. It promised its users compensation for the stolen cryptocurrencies, which was not fulfilled. The district court’s judicial panel concluded that the exchange has the obligation to reimburse the lost virtual assets, for it is stipulated under the exchange’s terms and conditions.
- However, the court ruled that Coinrail should not be held liable for the hacking incident. It also disregarded the plaintiff’s claim that the exchange moved the investors’ crypto assets from individual e-wallets to Coinrail’s own e-wallet, saying that it made the assets more vulnerable to hacking.
- Meanwhile, police retrieved a part of the stolen cryptocurrency (1360 ETHs) three years after it was stolen, stored at a cryptocurrency exchange based in Latin America.