According to reports, Upbit, a crypto exchange in South Korea, was recently sued by a crypto investor for its failure to process his transfer of luna coin before the crypto crashed.
The details of the lawsuit are under investigation by the Korean crypto exchange.
The lawsuit
A crypto investor in his 50s has filed a lawsuit against Dunamu Inc. This is the company that operates Upbit, which is a prominent crypto exchange in South Korea.
According to the investor’s allegations, the crypto exchange had delayed the processing of his coin transfer off its trading platform before the Luna coin crashed.
Therefore, he had to suffer monetary losses of about 156 million won, or $112,477. The lawsuit was filed in the previous week with the Seoul Central District Court.
Upbit is one of the biggest crypto exchanges currently operating in the country. The lawsuit elaborated that the investor had tried to initiate a transfer on March 24th of 1,310 Luna coins.
The investor said that he had made the transfer from his crypto wallet on Upbit to a Binance crypto wallet because he wanted to exchange the crypto for a Vietnamese dong.
On the day of the transfer, the price of the LUNA token, which has now been renamed Luna Classic (LUNC) had been $92.79.
In early May, the LUNA token saw its price crash to almost zero.
The transfer
The next day, the crypto investor had been informed by Binance that a problem with the transfer process had seen his coins returned.
But, when he checked his Upbit wallet, he could not find the coins there either. Once he inquired the South Korean crypto exchange, he was informed that there had been a mistake.
His coins had accidentally been deposited in the exchange’s own crypto wallet and account verification procedures were required for returning them in accordance with the law.
The law
Due to the Travel Rule outlined by the Financial Action Task Force (FATF), an amendment was made to the legislation in South Korea pertaining to reporting financial transactions.
This amendment had made on March 25th under which virtual asset service providers (VASPs) in the country were required to verify the information of both recipient and sender involved in crypto transactions.
According to an attorney representing the investor, his client had gotten in touch with Upbit 27 times about the timeline of his coins being returned to his wallet.
Every time, he had been informed by the crypto exchange that the return was still in process. Dunamu said that they were looking into the matter and would check the details of the lawsuit.
But, it should be noted that the terms of service of the Upbit crypto exchange outline that it cannot be held liable for any losses that an investor may suffer because of its compliance with regulations.
This may mean that Upbit may not be held liable for the losses that the crypto investor suffered because of its blunder.