Bengaluru Man Loses Bitcoin, Court Says Crypto Trading App Not Guilty

A Bengaluru man who had files a case against an online cryptocurrency trading platform after he lose cryptocurrency worth 12,484 USDT, has lost the legal battle as well, according to a Times of India (ToI) report. A city consumer court hearing the case maintained that he was a victim of cybercrime and the crypto trading app was in no way guilty of service deficiency in the matter.

On December 15, 2022, while Prashanth from Nayandahalli was trading in cryptocurrency via the Chennai-based Giottus Technologies Pvt Ltd he allegedly faced server trouble and his purchase failed to go through.
The next morning when he logged into the Giottus app he was shocked to see that the 12,484 USDT in his account had vanished. He then contacted the company's customer care and was taken through a few steps but all in vain.
Later, Prashanth registered a complaint about his cryptocurrency theft but didn't get a favorable response from the firm.

He then reportedly tried to claim insurance for his lost cryptocurrency which was promised by the company when he enrolled but was denied the same on the grounds that cyber-attacks did not come under the ambit of insurance.
In December last year, Prashanth filed a complaint with the cybercrime unit of Bengaluru Police and then moved to the Bengaluru Urban Second Additional District Consumer Disputes Redressal Commission with a complaint against Giottus for service deficiency.

In the litigation that started earlier this year, Prashanth presented his case through a chartered accountant.
The lawyer representing the trading firm Giottus held that the complaint should be dismissed as the complainant was not a customer, but he was trading in cryptocurrency not recognised by the Indian Government, adding that his account was hacked during the process. It was argued that on the basis of this, the complainant cannot seek redressal with this commission.

Besides, it was claimed that he had logged into the wrong website rather than the Giottus portal and submitted his credentials, leading to the hacking and siphoning of all of his crypto. According to the company counsel, Phishing is not covered under the insurance scheme. On September 19, the court dismissed the case, observing that the complainant was indeed a victim of cybercrime and there was no deficiency on the part of the crypto firm.

The court decision has come as a setback to crypto enthusiasts and crypto traders in Bengaluru. According to estimates, of the Rs 274 crore lost to cybercrimes in the city in the year 2022, Rs 70 crore (almost 25%) alone was lost to frauds related to cryptocurrency trading, a jump of 624% compared to the previous year.