Background
A user of a cryptocurrency exchange had coins stolen in an external hack. Claiming that "this happened because the exchange failed to meet its security obligations," the user sued the exchange for the value of the stolen coins. Changchun represented the exchange.
What Was at Stake
The user asserted the exchange's liability on several grounds — breach of personal data protection obligations, failure to block abnormal access, inadequate access controls. The issues were whether the exchange had met its obligations under its terms of use and the law, and whether it could be held responsible for the hack.
How Changchun Helped
Changchun made a concrete, item-by-item showing, supported by a large volume of material, that the exchange had performed all of its security and management obligations under its terms of use and was not negligent.
The court accepted Changchun's arguments and found for the exchange. The case shows that even where harm results from an external hack, responsibility cannot be imposed on an exchange as a matter of course where it has met its obligations. (Outcomes depend on the facts of each case and may differ.)