In a landmark decision, a Malaysian man, Yew See Tak, has been awarded nearly RM700,000 after successfully suing cryptocurrency investment firm Luno Malaysia Sdn Bhd for negligence. Yew claimed that Luno failed to safeguard his cryptocurrencies, resulting in the unauthorised use of over half a million ringgit in his Luno account to purchase Bitcoin in 2021.

Sessions Court judge Sazlina Safie ruled in favour of Yew, holding Luno negligent. The court ordered Luno to compensate Yew with RM597,920.05, along with an additional RM100,000 as exemplary damages. The decision marks the first of its kind in Malaysia against a cryptocurrency platform recognized by the Securities Commission Malaysia.

Despite the court order, Luno has obtained a temporary stay on the decision, preventing an immediate payment. The Sessions Court granted Luno a 14-day interim stay, allowing the company to file an appeal at the High Court. Yew can only demand the awarded sum after the expiration of this interim stay.

Unauthorised Transactions and Allegations

Yew filed the lawsuit against Luno in August 2021, seeking court orders, including a declaration that he was not involved in the unauthorised transactions on March 6, 2021, in his Luno account. He claimed that RM566,570.70 was used in illegal transactions to purchase Bitcoin, which was then transferred to an unknown account without his authorization.

Yew accused Luno of negligence for various reasons, including failure to stop illegal transactions exceeding daily limits, failure to verify transactions with him, failure to freeze the account despite suspicious activities, and failure to detect potential money laundering or report transactions to authorities.

Luno denied Yew's allegations, presenting its own chronology of events. The platform argued that it does not have access to Yew's Luno wallet, and Yew has full control over his account. Luno maintained that it fulfilled its duty of care by ensuring authorised transactions under Yew's account. The company also cited its standard terms of use, stating it does not owe a duty of care for losses resulting from Yew's transactions.

Significance of the Court's Decision

Yew's lawyer, Ong Yu Jian, highlighted the decision's importance, emphasising that it sends a clear message that cryptocurrency platforms can be held liable for customer account breaches. He sees it as a positive development in cryptocurrency law, potentially enhancing public trust in the safety of using such platforms.

This decision may impact how cryptocurrency platforms approach security measures and customer protection in Malaysia, setting a precedent for future cases.