In a recent legal battle, a Bengaluru man lost his case against an online cryptocurrency trading firm after losing cryptocurrency worth 12,484 USDT. The city consumer court ruled that he was a victim of cybercrime and the crypto trading app was not at fault.
The incident occurred on December 15, 2022, when the man, Prashanth, was trading in cryptocurrency through the Chennai-based Giottus Technologies Pvt Ltd. He encountered server trouble, and his purchase did not go through. The next day, he discovered that the 12,484 USDT in his account had disappeared. Despite reaching out to the company’s customer care, he was unable to retrieve his lost cryptocurrency.
Prashanth filed a complaint about the theft of his cryptocurrency but did not receive a satisfactory response from the firm. He then attempted to claim insurance for his lost funds, which the company had promised when he enrolled. However, his claim was denied on the grounds that cyber-attacks were not covered by the insurance policy.
To seek justice, Prashanth lodged a complaint with the cybercrime unit of the Bengaluru Police and approached the Bengaluru Urban second additional district consumer disputes redressal commission. He filed a complaint against Giottus for service deficiency.
During the litigation, Prashanth presented his case with the assistance of a chartered accountant. The lawyer representing Giottus argued that the complaint should be dismissed because Prashanth was not recognized as a customer, as he traded in cryptocurrency not recognized by the Indian government. Additionally, it was claimed that Prashanth’s account was hacked during the trading process because he had logged into the wrong website and submitted his credentials, leading to the hacking and theft of his cryptocurrency. The lawyer stated that phishing attacks are not covered under the company’s insurance scheme.
On September 19, the court dismissed the case, ruling that Prashanth was indeed a victim of cybercrime, and Giottus was not deficient in its services.
This case highlights the risks involved in cryptocurrency trading and the challenges faced when seeking legal recourse in such situations. It is a cautionary tale for individuals engaging in cryptocurrency transactions to exercise caution and ensure the security of their accounts and personal information.