The sessions court here granted a businessman, Yew See Tak, RM700,000 in damages as a result of his negligence lawsuit against a crypto e-wallet provider recognised by the Securities Commission (SC).
This marks a significant decision as the first of its kind against a cryptocurrency platform in Malaysia. Judge Sazlina Safie, in her online ruling, found in favour of Yew, stating that he had successfully substantiated his claim against Luno Malaysia Sdn Bhd on a balance of probabilities, according to FMT.
In her verdict, she directed the defendant to reimburse Yew with RM598,000, which was the amount withdrawn by an unidentified hacker from his account. Additionally, Yew, aged 49, was awarded an extra RM100,000 in exemplary damages.
On 28 August 2021, Yew initiated legal proceedings against Luno for its failure to adequately secure his cryptocurrency holdings within his Luno account.
In his statement of claim, Yew pointed out that Luno had received authorisation from the SC to provide cryptocurrency services and had been doing so since 29 July 2019.
He had registered as a customer to engage in buying, selling, and exchanging cryptocurrency through the defendant.
On 6 March 2021, an unidentified hacker conducted three separate transfers of funds from his account.
Yew contended that the defendant had a responsibility to safeguard these funds based on its expertise in the business.
Following the discovery of the losses, Yew lodged a complaint with the defendant’s customer service department and sent a letter of demand, but did not receive a favourable response.
Luno, represented by Faisal Moideen, Maximilian Tai, and Clarence Tang, refuted the allegations.
In the meantime, Ong Yu Jian, one of the attorneys representing Yew, commented that the court’s decision sets a precedent, signalling that cryptocurrency platforms can be held responsible for third-party hacking of customer accounts, potentially improving the safety and security of such platforms for the public.
He stated, “It is a very encouraging development in cryptocurrency law. “Hopefully, this leads to cryptocurrency platforms being much safer to use in the eyes of the public,” he added.
