Under the Virtual Asset User Protection Act, if there is hacking damage, does the exchange compensate?

The Virtual Asset User Protection Act is a law that provides that, when a user's assets are leaked due to hacking or the like, if the exchange's management responsibility is recognized, liability for damages may arise.

However, compensation is not made automatically in every case.

Under the Virtual Asset User Protection Act, the determination of liability is made according to the following criteria.

First, whether the duty of custody and management was violated.

An exchange has a duty to safely keep users' virtual assets, and it must separately store more than a certain proportion in a cold wallet.

When hacking damage occurs because these measures were not properly implemented, there is a high possibility that the exchange's negligence will be recognized.

Second, the level at which the security system is established.

In light of the purpose of the Virtual Asset User Protection Act, an exchange must have a security framework at a reasonable level.

When the basic security measures are insufficient or internal management is poor, liability may be expanded.

Third, whether there was user negligence.

When a user leaks account information or neglects security management, liability may be partially limited.

For example, sharing a password or using a phishing site may be judged as negligence.

The Virtual Asset User Protection Act is not a structure of "occurrence of hacking damage = automatic compensation," but a structure in which liability for compensation arises only when the exchange's management responsibility is recognized.

The scope of liability is determined based on ① whether the cause of the hacking is the exchange's security problem② whether user negligence was involved.

Therefore, when damage occurs, rather than judging whether compensation is due, it is necessary to conduct a legal review centering on the cause of the incident and whether the duty of management was violated.

Daeryun, a law firm ranked ninth in Korea based on the '25 value-added tax filings with the National Tax Service, helps to prevent legal problems in advance through prior legal advice.