As back-to-back incidents at Toss Bank and the virtual asset exchange Bithumb let users gain unexpected profits due to system errors, controversy is growing over legal liability. On the surface, both look like "system mistakes," but the legal responsibility users bear can differ depending on the structure of each case, legal experts said.
According to the financial industry on the 12th, at Toss Bank on the 10th for about seven minutes, the yen exchange rate was displayed at about half the market rate (about 472 won per 100 yen versus roughly 930 won), triggering large-scale currency exchanges. The total amount exchanged is said to be in the 10 billion-won range. Bithumb on the 6th of last month mistakenly paid out 620,000 bitcoins instead of an event reward worth 620,000 won. Based on the price at the time, that was about 60 trillion won.
Both companies acknowledged the system errors and began restoring the status quo, but analysts say the legal issues differ. For Bithumb, the core question is "must users return assets that were paid in error," whereas for Toss Bank the issue is "can already executed foreign-exchange transactions be canceled."
◇ Bithumb: "assets paid in error" vs. Toss: "already executed transactions"
Bithumb's erroneous bitcoin payout is viewed as a relatively simple case structurally. Users did not directly apply for a transaction and conclude a contract; rather, the exchange's mistake caused assets to be credited to user accounts contrary to prior notice.
In this situation, the first legal point typically reviewed is Article 741 of the Civil Act on "unjust enrichment." The principle is that if one has gained a benefit without legal cause, that benefit must be returned. Legal circles say the Bithumb case is also likely to reach a relatively clear conclusion under this principle.
There are also some precedents on criminal liability. The Supreme Court has previously held that breach of trust does not apply to acts of moving or disposing of virtual assets paid in error. However, analysts note there remains a possibility that other crimes could be at issue depending on how the assets were actually disposed of and the specific conduct involved.
By contrast, the Toss Bank exchange-rate error is legally far more complex. The bank displayed an incorrect rate, and users saw that screen, pressed the exchange button themselves, and a transaction was concluded.
On its face, the bank's and users' intentions aligned, forming a transaction. For that reason, it is insufficient to simply argue, "it was a system error, so let's treat it as if it never happened." There must be a legal basis to justify canceling the transaction.
Toss Bank is pursuing clawbacks based on the "error correction" provision in Article 8 of the Electronic Financial Transactions Act and on its terms and conditions. But many say that whether those provisions alone allow immediate cancellation of already executed transactions is a separate question.
Kim Byung-guk, an attorney at Beonhwa Law Office, said, "It is hard to categorically conclude that the Electronic Financial Transactions Act alone allows canceling transactions and immediately clawing them back," adding, "Whether there was an actual error, and whether users could have recognized that error, will be key issues."
In particular, some argue it is difficult to impose the same responsibility uniformly in cases where users would have struggled to recognize the error, such as small transactions using an auto-exchange feature. Conversely, if someone knew the rate was abnormal and repeatedly conducted large exchanges, legal experts generally view the likelihood of recognizing a duty to return as high.
◇ Clawback methods and the validity of terms are another dispute
The clawback method itself is emerging as another legal issue. Some users have already withdrawn money from their accounts or spent the yen obtained through exchange.
Attorney Kim Jeong-won of Hantteut Law Office said, "The bank can request returns based on its terms or internal rules, but forcibly withdrawing money again from a customer's account could raise another legal issue," adding, "Whether transactions can be canceled will likely be decided in court."
Questions are also being raised about the fairness of the terms. Attorney Kim Byung-guk said, "If the structure lets the bank avoid responsibility when it is favorable and shifts responsibility to consumers when it is unfavorable, there is room for invalidity under the Act on the Regulation of Terms and Conditions." Attorney Kim Jeong-won added, "While we cannot categorically declare the terms invalid, fairness assessments may vary depending on how the transaction occurred and the type of user."
◇ Criminal liability is even less certain for Toss Bank
Analysts also say the two cases differ in terms of criminal liability. For Bithumb, there are some Supreme Court rulings related to virtual assets paid in error, but for Toss Bank there is no clear standard on whether criminal penalties can apply even when users followed normal procedures based on the exchange rate shown on the screen.
In particular, whether repeatedly exchanging currency while knowing the rate was abnormal can be viewed as computer-related fraud could hinge on the facts and on proving intent.
Attorney Kim Byung-guk said, "As a matter of legal theory, one could examine fraud or deception, but it is not easy to prove that users actually had fraudulent intent when they transacted," adding, "Practically speaking, it does not appear highly likely to lead to criminal punishment." He continued, "Computer-use fraud also requires proof of intent, so applying it in reality is not easy, and there are not many related rulings."