Bithumb Under Fire by Seoul Court Over XENT Lawsuit Handling

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As a seasoned researcher and follower of the cryptocurrency market, I find myself both intrigued and concerned by the recent developments surrounding Bithumb, South Korea’s second-largest crypto exchange. The Seoul Central District Court’s criticism of Bithumb for its handling of the XENT token lawsuit is a stark reminder of the regulatory challenges that exchanges face in this rapidly evolving industry.

In a ruling by the Seoul Central District Court, Bithumb, South Korea’s second-largest cryptocurrency exchange, has been criticized for its handling of the lawsuit regarding the removal of the XENT token. The court deemed Bithumb’s justification for not responding to the lawsuit because of an internal issue as “unjustifiable.” The court further suggested that an apology to the investors should be extended.

During a court hearing, there were questions raised about the clarity of the exchanges’ explanations, as well as concerns voiced about how errors within the system might impact investors.

Bithumb Under Fire by Seoul Court Over XENT Lawsuit

During the court proceeding, Bithumb Korea explained they didn’t respond to a lawsuit because of an issue with email delivery, which meant the relevant team wasn’t made aware of the case. However, the court dismissed this explanation, emphasizing the potential consequences of failing to follow proper procedures.

The court observed that the cost of XENT increased by an astonishing 1400% after the issuance of the restraining order, potentially tempting fresh investors due to the company’s delay in timely informing its clients about this significant price surge.

Beyond this, the court additionally requested an apology from the cryptocurrency platform towards the investors for delaying their response to the legal action. However, the company attempted to explain the circumstances, yet the court remained unpersuaded. Furthermore, the court voiced its worry about how the matter was managed and its potential impact on investor trust.

SDKB Clash Over Delisting

At the hearing, there was disagreement between the firm and SDKB (the operator of the Cent Project) over ending trading support for XENT. SDKB pointed out that the security issues making XENT a stock of interest had been resolved, but Bithumb opted against resuming trading support due to concerns about maintaining business operations smoothly.

As a result, the SDKB voiced its concerns over the crypto exchange’s failure to reveal its methods for assessing a company’s long-term viability. Yet, Bithumb justified its actions, explaining that exchanges require some level of autonomy to handle poorly performing businesses efficiently.

As stated by the company, their actions adhered to ethical guidelines and were aimed at maintaining market stability on the exchange.

Regulatory and Operational Challenges

In light of the persistent legal disputes concerning the XENT token, the company is encountering further difficulties. Specifically, due to the Virtual Asset User Protection Act, South Korean authorities have mandated that cryptocurrency platforms like Bithumb should remit regulatory fees.

The fee of the exchange is 21.14 million won ($155,157) which shows the increasing legal expenses that the exchange has to bear due to the enhanced supervision of the exchanges by the regulatory authorities.

As a researcher, I’ve recently come across an update about SingularityNET’s (AGIX) token. The company has decided to discontinue its support for this token, which is a consequence of their project’s merger with FET and OCEAN. This merger has led to the creation of a new token called the Artificial Superintelligence (ASI) token.

 

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2024-08-19 21:57