Crypto exchange Upbit sued for delaying LUNA transfer while Terra crashed

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The parent company of South Korean crypto exchange Upbit has been sued by an investor for allegedly delaying a transfer of LUNA tokens for over a month. During that time, Terra infamously crashed — resulting in a supposed loss of 156 million won ($113,700) for the investor.

The unidentified man, said to be in his 50s, filed a lawsuit with the Seoul Central District Court last Thursday against Dunamu, which operates Upbit. He allegedly tried to transfer 1,310 LUNA tokens on March 24 from his Upbit crypto wallet to his Binance account in order to turn it into Vietnamese dong.

The next day, Binance notified the man that his LUNA had been returned due to a transfer problem — but he was unable to find them in his Upbit wallet. Turns out, the funds had accidentally been sent into Upbit’s own crypto wallet and the South Korean exchange could only return them to the man after undergoing standard account verification procedures required by law.

The man claims he asked Upbit a total of 27 times when the LUNA tokens would be returned to him. The crypto exchange allegedly always responded they were “being prepared.”

In July, seven South Korean crypto exchanges, including Upbit, were raided by police investigating fraud linked to the demise of Terra.

Over a month went by. Then, in May, Terra and its stablecoin TerraUSD plummeted, sending the entire crypto industry into a bear market. While the investor was waiting for Upbit to return his LUNA tokens, they became virtually worthless.

It remains to be seen whether the investor has a foundation for his lawsuit. Upbit’s fine print says that it’s not responsible for losses that occur from the company adhering to laws and regulations.

However, a former judge told Korea JoongAng Daily anonymously that the lawsuit comes down to “whether Dunamu has any unavoidable circumstance that reasonably prevented it from taking action regarding the man’s request.” If so, it could be safe.

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