Upbit sues for delay in transmission of Luna and resulting losses

An Upbit cryptocurrency exchange located in the Gangnam district of south Seoul. [YONHAP]

A lone cryptocurrency investor who failed to redeem the Luna coin he was storing in an online wallet before the cryptocurrency began depreciating has sued Dunamu, the Korean company that operates the Upbit cryptocurrency exchange.

The unnamed investor, identified only as a male in his 50s, filed the lawsuit in Seoul Central District Court Thursday, claiming Dunamu’s delay in processing a remittance caused losses of 156 million won (US$113,700) according to his attorney -dollars) led.

According to the lawyer, on March 24, the man attempted to transfer 1,310 Luna coins from his Upbit cryptocurrency wallet to a wallet he owns at Binance, a foreign cryptocurrency exchange, to exchange for Dong, the currency of Vietnam.

But Binance informed him the next day that the Luna coins were being returned due to an issue with the transfer process.

Unable to find the Luna coins returned by Binance in his own e-wallet, the investor sought and received an explanation from Upbit that his Luna coins had been accidentally deposited into Upbit’s own cryptocurrency wallet and that their return was subject to the mandatory Account verification process has been held up by law.

Under the travel rule introduced by the Financial Action Task Force (FATF), the global regulator of money laundering and terrorist financing, virtual asset service providers must verify sender and receiver information in virtual asset transactions.

On March 25, a domestic amendment to the law governing the reporting and use of certain financial transaction information went into effect with equivalent effect.

According to his attorney, the investor asked 27 times when his Luna coins would be returned to his wallet, but Upbit’s response each time was that their return was “in preparation.”

The man claims that due to Upbit’s delay in processing his claim, he was unable to convert the Luna coins he owned, but had no access to them before the cryptocurrency crashed in May.

In response to a request for comment on the case, Dunamu said only that the company was “currently reviewing the details of the lawsuit,” but the company’s terms of service say it is not responsible for any losses caused by the company’s compliance develop .

A former judge, who commented on the case on condition of anonymity, said the crux of the lawsuit was “whether Dunamu has unavoidable circumstances that reasonably prevent it from taking any action regarding the man’s request,” adding that it could avoid liability in this case.

BY MICHAEL LEE [[email protected]]

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