South Korean crypto exchange Coinone has successfully appealed a legal case involving the double withdrawal of Bitcoin, with the Seoul Western District Court ruling in its favor on July 3, 2025. The dispute stemmed from a 2018 incident during a period of intense Bitcoin network congestion, where five users were able to withdraw BTC twice due to a technical glitch.
Bitcoin Network Congestion Triggers Transaction Error
The issue began in late 2017 to early 2018, a time when Bitcoin’s transaction volume surged, overwhelming the network and causing confirmation delays. Coinone’s system mistakenly interpreted the slow network confirmations as failed withdrawals, prompting automatic account top-ups for users.
As a result, customers withdrew their Bitcoin a second time — even though the original transactions had been successfully processed on-chain.
At the time, Bitcoin transaction fees peaked at $55, and over 250,000 unconfirmed transactions clogged the mempool, contributing to the confusion and delayed confirmations.
Court Cites Unjust Enrichment, Clears Coinone of Liability
In the original ruling, a lower court partially blamed Coinone’s servers and awarded limited damages. However, the appeals court overturned this, asserting that the platform was not responsible for the error, as the delay stemmed from external network conditions.
The court ruled the traders received unjust enrichment — meaning they profited unfairly from a system error — and ordered them to return the excess Bitcoin.
This ruling sets a significant precedent for how exchanges may be protected from unforeseen blockchain-level disruptions that are not a result of their internal systems.
Implications for Crypto Exchanges and Traders
This decision reinforces the legal stance that users may be held accountable for knowingly withdrawing crypto funds more than once, even if made possible by system malfunctions.
Crypto traders are now on firmer legal notice that exploiting technical glitches can result in repayment obligations.
For exchanges, the outcome highlights the importance of clear transaction protocols, especially when interacting with decentralized networks susceptible to congestion or technical delays.
Coinone Clears Its Name
With the successful appeal, Coinone emerges with no liability for the double-withdrawn BTC, and the five users must repay the improperly received funds. The ruling serves as a strong reminder of the responsibility crypto users carry and the growing legal maturity of blockchain-related disputes in major jurisdictions like South Korea.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.