A local man has been awarded close to RM700,000 by a Malaysian Sessions Court, after successfully suing the cryptocurrency firm, Luno Malaysia, for negligence following the alleged unauthorised use of more than RM500,000 in his Luno account in 2021.
To provide some background to the case: Yew See Tak, the plaintiff in the lawsuit, filed a write of summons to the Sessions Court on 25 August 2021 against Luno Malaysia, after the discovery back in 6 March 2021 that his Luno account – Yew was a registered customer on the platform – that, at the time, held RM566,750.70. That amount was used to purchase 2.730096 Bitcoin (BTC) in three transactions. Yew also stated that the transactions were carried out in a “short span of time”.
Yew continued to tell the court that the newly purchased 2.730096 BTC, along with an existing 0.15106083 BTC in his Luno account, were then transferred into an unknown account illegally. He said that he never authorised those transfers and that he did not know the account it was transferred to.
In light of the alleged illegal activity, Yew proceeded to make a report to Luno’s customer service the next day, but the crypto firm merely took the view that there was nothing suspicious with his account. Clearly unhappy with the view, Yew lodged a police report over the transactions, in order to get the local authorities to investigate the case, adding that he suspected that those illegal transactions could be linked to other illegal activities.
Yew’s claim against Luno is that the firm was negligent for a variety of alleged reasons, chief among them being the failure to halt the alleged transaction, even when it exceeded the daily transaction limit. Other reasons include failure to verify with him whether he had authorised said transactions; failure to freeze his account despite the suspicious activities; and failure to detect the possibility of money laundering and report the transactions to authorities, including the SC.
Luno denied Yew’s allegations in court, and provided its own account of the events that occurred: the firm said that Yew had made his report to its customer service on the day of discovery, and not 7 March 2021. The crypto firm then told the court that it proceeded to lock Yew’s account on 8 March 2021, and that it had also responded further to Yew the following day, saying that the plaintiff’s Luno wallet was accessed through his own email and password, and that it detected no unusual sign-ins at the time. And that all the alleged illegal transactions were conducted via Yew’s phone and authorised through an SMS sent to his number.
In its defense, Luno said that it had no access to Yew’s wallet, and that he was the only person who had full access and exclusive control of Luno account. It further argued that the onus was on Yew to keep his own gadget and passwords secure, not theirs.
The Sessions Court ultimately ruled in favour of Yew and ordered, among others, that Luno compensate him the sum of RM597,920.05, along with an additional RM100,000 as exemplary damages, bringing the total compensation to more or less the amount Yew had lost in the alleged illegal transaction. The court also gave the firm an interim stay of 14 days, so that it may file an appeal to the High Court against the decision, which at this point, it seems likely that it will.
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