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Bithumb Employee Found Guilty of Security Failings that Led to Hack

Bithumb

Exchange Hack Legal Security

South Korea

Author

Tim Alper

Author

Tim Alper

About Author

Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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Last updated:

June 26, 2023

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A court in South Korea has found a senior employee at crypto exchange Bithumb guilty of breaches of internet security law. The judge stated that the employee’s actions led to a 2017 hack that saw a raider make off with the personal information of 31,000 customers – and also found the exchange’s operator, Bithumb Korea, guilty of security law violations.

Per media outlet Hankook Ilbo, following the security breach a thief was able to make off with some USD 6 million worth of cryptocurrency holdings, using customers’ login details and passwords.

Prosecutors were keen to push charges against an individual employee at the exchange, who was believed to have made key security protocol-related errors.

The court judged that a 48-year-old man referred to only by his surname, Lee, had neglected to install antivirus software on his workplace PC, and had not encrypted customer data.

The judge added that Bithumb Korea had also failed to take quick and decisive action to stop the hacks, and had done too little to prevent possible follow-up attacks.

Lee was hit with a maximum fine of over USD 25,000.

Police successfully tracked down the hacker following the 2017 raid, and a court later sentenced him to three years in prison.

Meanwhile, the most recent Cipher Trace Cryptocurrency Anti-Money Laundering Report has found that “losses from fraud, misappropriation of funds, exchange hacks and thefts added up to USD 4.5 billion” in 2019.

However, although fraud and misappropriation-related crypto losses shot up by 533% last year, it appears that exchanges are finally shoring up their security systems to keep cybercriminals out: Hacks and thefts fell by 66% in 2019.