A senior executive at Kakao, one of South Korea’s largest internet companies, is suing the company’s blockchain subsidiary, GroundX, for about KRW 10 billion ($7.6 million). This lawsuit follows a hack that compromised the executive’s Klip wallet. It is integrated into KakaoTalk, the popular messaging app. The hack occurred in March 2022. In this breach, attackers accessed the executive’s account and transferred significant cryptocurrency to foreign exchanges.
The lawsuit also raises many questions about GroundX’s safety measures to safeguard Klip wallet users. This incident reminds us that wallets connected to popular platforms are not safe as more people embrace cryptocurrency.
The hack enabled the attackers to break into the executive’s KakaoTalk and steal cryptocurrency. After this, it was quickly transferred to international exchanges, making it difficult to return. The executive says that GroundX could not offer sufficient security, which led to a huge loss.
Klip Wallet Case Marks Significant Legal Challenge for Blockchain Firms
In the lawsuit, the executive claims the total loss incurred in the breach. This case is one of the most significant legal cases against a blockchain company in South Korea and demonstrates the need for better cybersecurity measures in the growing crypto space.
Moreover, Klip is an app connected to KakaoTalk through which users can store, transfer, and receive cryptocurrencies and NFTs. Klip was created by GroundX as Kakao’s way of expanding blockchain technology’s popularity.
A Kakao representative said that the company is in the process of reorganizing GroundX. It is facing staff shortages and has limited means to deal with security problems. However, Kakao is not stopping its blockchain projects, with GroundX leading its Web3 and NFT endeavors.
Ultimately, the lawsuit may greatly affect GroundX and Kakao, especially as they seek to become pioneers in blockchain technology and digital finance in South Korea. This case is a good lesson for other companies on the necessity of security measures to safeguard users’ property.
