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An investor who sued the cryptocurrency exchange Upbit for $100 million in damages has won his case. The lawsuit was filed because the exchange failed to transfer his Lunar Coins in a timely manner before the Lunar-Terra crash in 2022, which caused the value of his coins to plummet to almost zero. This case marks the first time a court has held a cryptocurrency exchange liable for such damages.
The Seoul Central District Court ruled in favor of the investor, Mr. Lee, finding that Upbit’s operator, Dunamu, was responsible for the delayed transfer of his coins. Mr. Lee had attempted to transfer approximately 1,310 Lunar Coins from his Upbit wallet to Binance in March 2022, intending to sell them. However, due to an addressing error, the coins were returned to Upbit’s wallet. Despite Mr. Lee’s request, Upbit did not return the coins to him until after the crash occurred, resulting in significant financial loss.
The court found that Upbit had an obligation to have systems in place to handle such errors and that their failure to do so made them liable for the damages. The court also rejected Upbit’s argument that they were not responsible for the incorrect withdrawal due to their terms and conditions, deeming this clause unfair to customers.
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