No security lapse, crypto-wallet firm needn't pay RM700k: Court

The Shah Alam High Court found that there had been no security lapses on the part of a crypto e-wallet provider linked to a hacked customer’s account.

As a result, judicial commissioner Hazizah Kassim today allowed Luno Malaysia Sdn Bhd’s appeal against a ruling for it to pay RM700,000 to businessperson Yew See Tak.

The civil court ruled among others that there were no security lapses on Luno’s part when safeguarding the customer’s account.

Hazizah also ruled that the Petaling Jaya Sessions Court had imposed an unduly high standard of duty of care, with insufficient evidence tendered.

A representative from Luno confirmed with Malaysiakini the outcome of the proceedings.

On Oct 31 last year, the lower court allowed Yew’s lawsuit and ordered Luno to pay him RM700,000, which included exemplary damages.

Yew claimed that an unknown hacker had withdrawn RM598,000 from his account with Luno on March 6, 2021.

The plaintiff claimed that Luno failed to safeguard the cryptocurrency in his account with the crypto e-wallet provider, who received Securities Commission approval to operate in 2019.

Yew claimed he had filed a complaint with the defendant’s customer service department after finding out about the loss.

He alleged that Luno did not give a positive response to his letter of demand.

Luno was represented by the law firm Moideen & Max.

All security features passed

In a media statement later today, Luno confirmed the civil court ruling in favour of Malaysia’s leading regulated digital assets exchange.

The firm said as an SC-registered platform, it always upheld the strongest levels of regulatory compliance and customer security and followed strict procedures to keep its customers’ cryptocurrencies safe and secure.

The online platform said in this case, its security features operated as designed, with all account safeguards being successfully passed, including two-factor authentication.

“While Luno has some of the most intensive security processes in crypto, as confirmed by an April 2024 ranking by CCData, the case emphasises the need for customers to maintain the security of their own email accounts, mobile devices, and passwords.

“Luno continues to focus on educating customers against financial fraud, underscoring the importance of vigilance in managing personal data, and encourages customers to enable the long-already available additional security features, namely, trusted device security and 2FA,” it added.

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