Luno Malaysia Sdn Bhd v Yew See Tak (BA-12BNCvC-52-11/2023)

This is an appeal against the judgment of the Sessions Court dated 31st October 2023 after a full trial. The learned Sessions Court Judge allowed the plaintiff’s claim against the defendant and entered judgment in the sum 15/10/2024 09:58:36 BA-12BNCvC-52-11/2023 Kand. 37 2 of RM597,920.05 for special damages and RM100,000.00 being exemplary damages with interest and costs.

On 29th July 2024 this Court allowed the defendant’s appeal with costs.

The Plaintiff (Yew See Tak) is suing the Defendant (Luno) for negligence. The Plaintiff is a registered customer of the Defendant and Luno account holder. Plaintiff's identity account is ivanstyew73@yahoo.com.

The Defendant is handling the Luno Wallet to allow its customers to keep money in their e-wallet, store cryptocurrency and also buy and sell cryptocurrencies.

The Defendant has been a recognized market operator (RMO) for cryptocurrency by the Securities Commission since 29.7.2019.

On 6.3.2021 Plaintiff realized that without his knowledge, approval and direction, the following transactions took place in his Luno Account: a) the purchase of 2.730096 Bitcoin for RM566,570.70 through three different transactions; and b) 2.730096 BTCs and the existing 0.15106083 Bitcoin in Plaintiff's Luno account (totaling 2.88115683) were transferred to an unknown account through several different transactions.

The defendant received the report from the plaintiff on 6.3.2021 vide its customer service support centre alleging that there was an authorised access to the plaintiffs’ Luno Wallet and all the funds in his Luno Account were sent out. Because of that, the plaintiff requested the defendant to suspend the withdrawal and recover the amount of RM566,000.00.

On 8.3.2021, the defendant responded to the plaintiff and informed that it had locked the plaintiff’s Luno Account for security purposes.

The cause of action in this case is clearly pleaded in paragraph 1 of the Statement of Claim, which is – “1. Tuntutan plaintif terhadap defendan adalah berdasarkan kecuaian defendan kerana gagal untuk melindungi dan menjaga matawang kripto (cryptocurrency) plaintif yang berada di dalam pegangan dan/atau kawalannya pada masa yang material”.

It is the plaintiff’s case that the defendant has a duty of care to the plaintiff as a customer to the defendant. The defendant’s duty is to exercise reasonable attention and skills in handling instructions given by the plaintiff to pay, purchase and other activities in the plaintiff’s Luno Account.

In its defence, the defendant maintained that the plaintiff’s cryptocurrency remains solely under the custody of the plaintiff and the defendant does not have any control or access to the plaintiff’s cryptocurrency. All reasonable steps have been taken to ensure all transactions performed under the plaintiff’s Luno Account as authorised by the plaintiff according to the security protocols. The defendant’s platform operated on a multi-level authentication where the account holder will have 4 to verify and authenticate transactions before a transaction or transfer could be successfully performed.

The defendant contended that as a Digital Asset Exchange (DAX) Operator, the defendant only owes a duty of care to ensure all transactions under the plaintiff’s Luno Account are duly authorised. The defendant does not owe any duty of care to the plaintiff – i. for any transaction made that resulted in losses by the plaintiff. ii. for any action taken by the plaintiff in conducting payment, purchase instructions or activities performed under the plaintiff’s Luno Account.

Therefore, it is the defendant’s contention that they cannot intervene in the transactions that were authorised by the plaintiff. On 6.3.2021, the plaintiff was in an exclusive control of the plaintiff’s Luno Wallet. Each of the Disputed Transactions were transacted vide Luno application that was installed on the plaintiff’s mobile phone which is an iPhone X (user agent: iPhone X; iOS 14.4; Scale/3.0) and was approved by way of SMS to the plaintiff’s mobile number 6012-4315783 (referred to as Mobile Number). The defendant also averred that the plaintiff had enabled the Two Factor Authentication (2FA) feature on the Plaintiff’ Luno Account as early as 9.1.2018.

According to the defendant, on 6.3.2021 there were 3 purchases of Bitcoin and 4 transfers of Bitcoin performed to the wallet Recipient Address 5 from the plaintiff’s Luno Wallet. The following events took place in the Plaintiff’s Luno Account – a) At approximately 4.25pm there was a successful sign-in to the Luno Account from the Macintosh using email address, password and a unique Two-Factor Authentication code; b) An approximately 4.27pm, RM100,000.00 was used to purchase Bitcoin on the plaintiff’ Luno Wallet (the 1st Purchase); c) At approximately 4.28pm, there was a request to transfer 0.635 Bitcoin to the Recipient Address initiated from the Macintosh. An authorisation request was sent via SMS to the Mobile Number and the request was denied as follows – i. The SMS stating “You’re sending cryptocurrency. Please authorise or deny” was interacted with, which open the Luno Application; ii. The Luno Application was then opened and displayed the details of the sending as well as the ‘Authorise” and “Deny” options; and iii. The ‘Deny’ option was selected. d) At approximately 4.30 pm, a transfer of 0.635 Bitcoin to the Recipient Address from the Macintosh was initiated. An 6 authorisation request again sent via SMS to the Mobile Number and the authorisation was granted (the 1st Transaction); e) At approximately 4.31 pm, two transactions were performed to purchase Bitcoin in which the first one amounted to RM250,000.00 and the second one in the sum of RM216,000.00 (the 2nd Purchase and 3rd Purchase); f) Also, at 4.31pm, a transfer of 0.70 Bitcoin was made to the Recipient Address from the Macintosh and the transfer request was successful upon authorization via SMS sent to the plaintiff’s mobile number (the 2nd Transaction); g) At approximately 4.33pm, a further transfer of 0.70 bitcoin to the Recipient Address from the Macintosh was made and the transfer request was successful upon authorisation via SMS sent to the plaintiff’s mobile number (the 3rd Transaction); and h) At approximately 4.35pm, a transfer of 0.8464 bitcoin to the Recipient Address from the Macintosh was made, the transfer request was successful upon authorisation vis SMS sent to the plaintiff’s Mobile Number (referred to the 4th Transaction).

On 9.3.2021 around 9.44pm, the plaintiff responded to the defendant and claimed that all of his funds in cryptocurrency and cash has been withdrawn from his Luno Wallet on 6.3.2021 without his authorisation. The plaintiff also contended that he had no knowledge about Disputed Transaction and the withdrawals were not conducted by him. Having said that, the plaintiff however claimed that his mobile phone remained in his possession at all material times when the Bitcoin was transferred out of his Luno Wallet.

The Sessions Court held that the defendant owes a duty of care and fiduciary duty to the plaintiff. In allowing the claim, the Sessions Court, among others, held – i. The response by the defendant in addressing the plaintiff’s complaints were not prompt; ii. The defendant failed to call its material witnesses who could have given direct evidence to the defendant’s actions upon receiving the plaintiff’s complaints; iii. It is fair, just and reasonable to impose a duty of care and also places a higher duty of care on the defendant as the defendant is the only Recognized Market Operator (RMO) by the Securities Commission for cryptocurrency trade at the material time; iv. The defendant failed to exercise a reasonable standard of care towards the plaintiff as expected from an established RMO.

The plaintiff averred that the defendant has a duty of care and fiduciary duty as a trustee, and the Defendant has breached that duty to the Plaintiff.

The plaintiff pleaded that the 1st and 2nd Transactions were illegal since the transactions were without the Plaintiff's knowledge and approval. According to the plaintiff, the pattern of the transactions which is disputed by the plaintiff was questionable as large amount of cash were used with the same timing and in immediate sequence to buy Bitcoin which were transferred out.

It was further alleged by the plaintiff that there is evidence of reprehensible conduct by the defendant which warrants aggravated and exemplary damages.

The defendant submitted that the learned trial judge had failed to appreciate the evidence in determining that the defendant owes a duty of care and/or fiduciary duty to the plaintiff.

It is the defendant’s contention that there was no breach of security protocol of the defendant’s platform or the plaintiff’s Luno Account at the time the Disputed Transaction was carried out.

The defendant further contended that the plaintiff’s Luno Account was accessed as a result of the plaintiff’s own failure in safeguarding the security 9 of his own personal email account and password as well his mobile devices. Besides that, the plaintiff agreed to be bound by the Terms of Use in particular Article 13 which states – “Article 13. Account Security Luno takes security very seriously and the measures we have in place to protect your Luna Account are explained on the Security page of the Luno website. However, you are solely responsible for: • Maintaining adequate security and control over your Luno Account sign-in details, including but not limited to any passwords, personal identification numbers (PINs), API keys, or any other codes associated with your Luno Account;”

Based on the Memorandum of Appeal dated 1.12.2023, the defendant listed out 8 grounds of appeal whereas in the Supplemental Memorandum of Appeal dated 10.1.2024 there are 13 grounds listed by the defendant.

This Court is of the opinion that the main issues to be decided are as follows – i. Whether the learned Sessions Court Judge has erred in her finding that the defendant had breached its duty of care. ii. Whether the Sessions Court Judge is plainly wrong in allowing the plaintiff’s claim.

This Court in exercising its appellate intervention should not intervene in a trial judge’s findings unless the trial judge is plainly wrong.

In the case of Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453, the Federal Court decided as follows –

It is now established that the principle on which an appellate court could interfere with findings of fact by the trial court is "the plainly wrong test" principle; see the Federal Court in Gan Yook Chin & Anor (P) v. Lee Ing Chin @ Lee Teck Seng & Anor [2004] 4 CLJ 309; [2005] 2 MLJ 1 (at p. 10) per Steve Shim CJ SS. More recently, this principle of appellate intervention was affirmed by the Federal Court in UEM Group Berhad v. Genisys Integrated Engineers Pte Ltd [2010] 9 CLJ 785 where it was held at p. 800: It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence. (See Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32; Watt v. Thomas [1947] AC 484; and Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309).

The decision made by this Court is based on the oral evidence and contemporaneous documentary evidence before the Sessions Court.

This Court is of the view that the learned trial judge should test the veracity of the plaintiff’s oral evidence by reference to the contemporary documentary evidence. Chang Min Tat FJ in the case of Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 1 LNS 119 explained the importance for the trial judge to consider the contemporary documents – “Nevertheless the learned trial Judge expressed himself to be completely satisfied with the veracity of the respondent's witnesses and their evidence. He purported to come to certain findings of fact on the oral evidence but did not notice or consider that the respondent's oral evidence openly clashed with its contemporaneous documentary evidence.”

After a consideration of the transcript of oral evidence, the documentary evidence, the pleadings, submissions and judgment of the trial court, this Court is of the view that with respect, the learned trial judge fell into error in allowing the plaintiff’s claim. The decision of this Court is based on the reasons as discussed below. ISSUE 1: WHETHER THE LEARNED SESSIONS COURT JUDGE HAS ERRED IN HER FINDING THAT THE DEFENDANT HAS BREACHED ITS DUTY OF CARE

The position in relation to the standard duty of care is well set out in the case of Donoghue v. Stevenson [1932] AC 580 as quoted by Lord Porter in Bolton v. Stone [1951] 1 All ER 1078 (at p. 1081) as follows - “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Lord Porter then went on to say: It is not enough that the event should be such as can reasonably be foreseen. The further result that the injury is likely to follow must also be such as a reasonable man would contemplate before he can be convicted of actionable negligence. Nor is the remote 12 possibility to lead a reasonable man to anticipate it. The existence of some risk is an ordinary incident of life, even when all due care has been, as it must be, taken." Lord Denning in his judgment in Brown v. National Coal Board [1962] 1 All ER 81, 89 after considering that the Coal Mines Act, 1911 and Factories Act, 1937 imposed a higher duty than was imposed by the common law then stated: for the common law does not require a man to provide security against a possible cause of injury, even though it is foreseeable."

The learned trial judge in this appeal did not consider the entirety of the evidence before her in relation to her finding that the defendant has a duty of care which is heavier than the reasonable standard duty of care that was imposed by the common law.

This Court with respect, could not agree with the Judge’s finding in subjecting Luno to a higher standard of care solely because Luno is licensed under the Securities Commission. The relevant part of her ground of judgment is as follows– “[2] Mahkamah dapat menjangkakan dengan kepercayaan yang diberikan kepada SC, tanggungjawab Luno terhadap pelanggan menjadi sangat berat memandangkan ia adalah satu platform yang telah diberi kepercayaan penuh oleh kerajaan kita”.

It is unjustified to impose an excessive duty of care on Luno. Such excessive duty of care in this Court’s opinion is unreasonable and against the trite laws in Malaysia.

In the case of Tenaga Nasional Malaysia v Batu Kemas Industri Sdn Bhd [2018] 5 MLJ 561, the Federal Court held that in order for a duty of care to arise in negligence, the affected party must satisfy the following elements – i. Harm must be reasonably foreseeable as a result of the defendant’s conduct; ii. The parties must be in a relationship of proximity; and iii. It must be fair, just and reasonable to impose liability.

Based on the facts of this case, this Court is of the opinion that the plaintiff has failed to satisfy all three elements in the case of Tenaga Nasional v Batu Kemas Industri Sdn Bhd (supra) based on the reasons discussed below.

In relation to the learned judge finding on breach of duty by the defendant to the plaintiff, this Court finds that the learned judge erred in not considering a series of admission made by the plaintiff during cross examination.

From the plaintiff’s own testimony, he admitted that he had lost control of his email, and someone had accessed to his email account. The plaintiff also admitted that it is his responsibility to keep and maintain the safety of his email and password. The learned trial judge did not appreciate this material evidence.

The email that was used by the plaintiff for his Luno Account is the ID known as ivanstyew73@yahoo.com. The same email is also used by the plaintiff as his registered ID for his other two accounts under the Binance and Remitano.

The plaintiff’s evidence which is particularly material is that it is possible for someone else who has that email access to also be able to access these accounts because they are tied to that email appears not to have been considered by the learned judge.

The plaintiff confirmed that since he has lost control of his email, that is the reason all those three accounts were compromised, and he was then logged out of the email. The plaintiff also agreed that the defendant has no password to his email.

The relevant part of plaintiff’s cross-examination is reproduced below- “Q: And what happened actually on that day Mr Yew, is that you have lost control to your email that is linked to all these three accounts. That is why all three account were compromised. Not just Luno, the defendant. Binance was compromised as well. Q: Remitano was compromised as well because it was your email that has been compromised, correct? A: Potentially, yes. Q: Yes, and that is why when you first wrote to my client, you said “I found unauthorised access to my email”. Q: And you were logged out of your email. Q: Now Mr Yew, let me get this straight. You would agree with me that the defendant has no password to your email? A: Yes, I agree on that.

This Court is of the view that the plaintiff’s evidence is overwhelming, and the learned judge should be able to come to a different finding if she considers it.

The plaintiff further admits that the defendant has no responsibility to take care of the plaintiff’s email and password as can be seen in relevant part of plaintiff’s cross-examination – “Q: Yes, so how is it Mr Yew, that it is my client’s fault when you are unable to keep your email and password safe? You would agree it’s not my client’s fault? A: No. I’m not saying that Luno is liable to keep my password and email. I’m not saying that.”

Based of the following evidence, this Court also finds that it was due to the plaintiff’s own conduct that he has lost control of his email which has then led to the Disputed Transaction – Q: In this case, your email is lost. Q: Your email, this is not the Luno wallet, your email. Q: Was lost because you had lost control of it. A: Somebody has unauthorised access to my email. Q: Ok, so you agree with me that is what happened. Somebody managed to gain control of your email. A: Until today I still don’t have the answer what happened to my email. Q: but, you said it. A: I only found out that my email was accessed without my permission, without my knowledge as well. Q: So, that is actually the starting point, isn’t it Mr Yew? A: Yes Q: the starting point is you lost control of your own email. Right?

The plaintiff also admitted that his responsibility is to keep the security of both his personal email account and his mobile phone as can be seen in his evidence during cross-examination – “Q: But it is your responsibility as well, isn’t it Mt Yew, to keep, to make sure the security of your phone is not compromised. My client cannot do anything to protect your phone. A: Understand. Q: It is in your possession. A: Correct. Q: Correct? A: Correct. Q: So, if your phone is compromised then it would be your responsibility. Correct? A: My phone is my responsibility, yes.”

I had perused the grounds of judgments, and with due respect to the Sessions Court Judge I find that she is plainly wrong for not appreciating the testimony of the plaintiff where he has conceded that his personal email account and his iPhone X had been compromised which has then led to the Disputed Transaction carried out in his Luno Account.

Therefore, this Court has a duty to intervene in the findings made by the learned judge that Luno owes a duty of care and has breached the said duty.

It is observed that there was no testimony in re-examination to negate the above testimony. Not only that, to my mind, the evidence given by the plaintiff during the re-examination instead goes on to show support to the defendant’s case. I reproduced the said question: “Q: Alright. Ok. My last question for re-examination. It was proposed that it was your own fault when you lost control over your email account. Sorry, it was not proposed to you. I mean, yes, that was proposed to you. But my question is specifically this, it was said that all of this, the fact that you lost access to your email account, this was not stated in your statement of claim. If you can recall that? A: Yes Q: Yes. Can you explain why this was not stated in your statement of claim the fact that you lost access to your email account? A: Because the first thing is that, I am not sure that this is the thing that can, is triggering to the negligence of Luno that caused my losses, alright. And I am also not too sure whether this loss is due to any illegal activities. I am not too sure. So, like I mentioned just now, my email was blocked. That’s all I know, alright. And 18 then the fund is lost. Whether this is related or not related, I am not sure. But what I am communicating to Luno in the first place is to feedback that this thing happened, the email has been blocked out. It seems suspicious. Please help me to block my account.

It is important to keep in mind that there was an admission by the plaintiff that the starting point of the Disputed Transaction is because he lost control of his own email. However, this important fact was not pleaded by the plaintiff in his Statement of Claim. Q: You are not answering the question. Why is it not pleaded in your statement of claim. Answer the question. A: Because in the first place, it didn’t come to my mind that this is related.”

To my mind, it is reasonable for the plaintiff to feel suspicious when his email has been blocked out. The plaintiff failed to explain why the email has been blocked out when he himself has the control over his email account, password and iPhone-X? The evidence suggests that on 6.3.2021 the plaintiff has knowingly and aware of the fact that he has lost control of his email. The plaintiff’s responses that the fact is not pleaded in the Statement of Claim because it didn’t come to his mind that it is related to his own fault is out of proportion.

The plaintiff has admitted that the plaintiff's loss of control over his email and password and his iPhone has resulted in someone gaining access to his Luno Account. In such circumstances, it is unreasonable to conclude that the plaintiff has proven that the defendant breached its duty of care.

This Court also refer to the finding of the learned judge on the defendant’s alleged mistake by referring to the decision in the case of Robert Ong Thien Cheng v Luno PTE Ltd & Anor [2020] 1 LNS 2194.

In the plaintiff’s own testimony, it is clear that the disputed transaction is not a technical glitch as in the case of Robert Ong Thien Cheng (supra). The transcript of evidence by the witnesses during trial also show that there is no evidence related to a mistake on the part of the defendant to support the finding of the learned trial judge.

Therefore, this Court is with the defendant that the Disputed Transactions were authorised in compliance with the defendant’s security protocol.

As admitted by the plaintiff, it was his personal email account and his iPhone X was compromised leading to the unauthorised transfer of Bitcoins out of his Luno Wallet. The Disputed Transaction was not a result of any mistake or technical glitches on the part of the defendant.

On the same premises, the plaintiff averred that it is just, fair and reasonable for the Sessions Court to impose a heavier duty of care on the defendant because the defendant is the only operator recognised by the Securities Commission.

The relevant paragraph of the Sessions Court grounds of judgment is as follows – “[2] Mahkamah dapat menjangkakan dengan kepercayaan yang diberikan oleh SC (Securities Commission) tanggungjawab Luno terhadap pelanggan menjadi sangat berat memandangkan ia adalah satu platform yang telah diberikan kepercayaan penuh oleh kerajaan kita”.

With regards to this issue, this Court is also with the defendant. The findings made by the Sessions Court is without any legal basis. To impose a higher degree of duty of care on the defendant since the defendant is a licensed RMO with the Securities Commission is without merit.

With regards to causation, the learned judge has considered proximity issue and referred to the case of Manjit Kaur Pertap Singh v Dr Nagasparan Nathcappan [2023] 1 LNS 2424 which states – “[18] To make a case for negligence, it is vital to prove that the respondent’s negligence caused the injury and that there must be a link between the injury and the negligent act”.

The Court of Appeal in that case also held that there must be a link between the wrongdoing and the damage caused and that the burden lies on the plaintiff to prove it.

However, in this case the learned judge failed to appreciate the plaintiff’s oral evidence in applying the above legal principles. Having considered the security protocol provided by the defendant was not compromised and the Disputed Transaction were approved vide plaintiff’s email account and mobile number, there was no wrongdoing on the part of 21 the defendant. Therefore, plaintiff failed to discharge his burden to proof the link between the Disputed Transaction and the alleged wrongdoing on the part of defendant. This Court’s findings are also based on the admission by the plaintiff that the Disputed Transaction is already cleared out when he reported the Disputed Transaction to the defendant.

The defendant also refers to the case of Lok Kok Beng & 40 Ors v Loh Chiak Eong & Anor [2015] 4 MLJ 734 in which the Federal Court dismissed the appeal given that the requirement of reasonable foreseeability of damage has not been satisfied to impose a duty of care.

Therefore, this Court is with the defendant that the defendant cannot be made responsible for these Disputed Transaction which only arose due to the plaintiff not being able to keep his personal email account and his mobile phone securely from being hacked. The learned judge has erred in failing to consider this evidence. It is apparent that the trial judge has misdirected herself when she only relied on the existence of a proximity relationship between the defendant and the plaintiff in establishing the duty of care while failing to consider all other evidence before her.

The Sessions Court had decided that the failure on the part of the defendant to fix a maximum limit of daily withdrawal amount to a breach of duty of care. However, the issue with regards to the daily limit is not pleaded by the plaintiff.

The plaintiff also averred that the defendant failed to exercise due caution and skill when executing the plaintiff’s instructions which include failure to fix a maximum limit of purchase and withdrawal of Bitcoin from customer’s Luno account at that material time. The learned judge has agreed to the plaintiff’s submission and further decides that since the defendant did not fix the maximum limit, there is breach duty of care owed to the plaintiff.

During cross examination, the plaintiff agreed to the defendant’s counsel’s suggestion that the daily limit and monthly limit is not found in the Terms of Use. The defendant contended that the introduction of the transaction limit in August 2021 has no retrospective application to the Disputed Transactions.

This Court finds that there is no legal basis for the learned trial judge in deciding that the transaction limit ought to have been introduced at the material time. The finding of the learned judge is tantamount to rewriting the Terms of Use on behalf of the parties.

The Court of Appeal in the case of Bank Islam Malaysia Berhad v Lim Kok Hoe & Anor and other appeals [2009] 6 MLJ 839, decided as follows - “It is trite law that the court should not rewrite the terms of the contract between the parties that it deems to be fair or equitable”.

This Court is of the view that the implementation of maximum limit for withdrawal in cryptocurrencies’ transaction by the defendant as RMO after 23 the incident of the Disputed Transaction cannot be regarded as an admission of breach duty of care on the part of the defendant.

The learned judge is plainly wrong in deciding that a trust relationship exists between the plaintiff and the defendant when there is no trust instrument entered into. The defendant is merely providing a platform for the plaintiff to trade cryptocurrency. The Terms of Use does not in any event create a trust relationship.

This Court refers to relevant paragraph of the Grounds of Judgments in which the learned Sessions Court Judge held - “[5] Jika demikian, bagaimana pula tanggungjawab Luno terhadap pelanggan jika Bitcoins pelanggan hilang/lesap terhadap kecuaian mana-mana pihak atau apabila plaintif berjaya membuktikan ia bukanlah akibat tingkahlaku plaintif sendiri?

Adakah ini perlu dilihat berdasarkan terma perjanjian atau kontrak antara pihak-pihak semata (breach of contract) atau wujudnya perlanggaran tanggungjawab fidusiari (Breach of fiduciary duty) jika ada?

Mahkamah dapati bahawa defendan telah gagal membuktikan bahawa defendan telah menggunakan kemahiran berjaga-jaga yang munasabah sebagai satu RMO yang diiktiraf. Sekali lagi Mahkamah katakan bahawa Luno adalah satu platform yang diiktiraf SC. Pengiktirafan ini memberi kesan besar iaitu kepercayaan penuh dan SC sendiri mengesyorkan pengguna melanggan RMO yang diiktiraf sahaja”.

The plaintiff’s evidence which is particularly material and relevant is not considered by the learned trial judge as mentioned above. In doing so, the learned judge failed to consider that the defendant will only process the 24 transaction in plaintiff’s Luno Wallet according to instruction given by the plaintiff. This position is clearly mentioned in the Terms of Use.

The learned judge also failed to appreciate the evidence of DW1, Paul Andrew Hawker who is familiar with the account access and authorization processes of a Luno Account. According to DW1, the defendant’s platform is akin to a digital bank. Essentially, the defendant is the gatekeeper of the plaintiff’s cryptocurrencies in which the defendant will continue to keep the plaintiff’s cryptocurrencies until and unless there is an instruction received from the plaintiff. Therefore, the learned trial judge fell into error when she held that the defendant owes a fiduciary duty against the plaintiff.

Having addressed the first issue extensively, it is therefore glaring that the learned judge is plainly wrong in her finding in allowing the plaintiff’s claim.

Cryptocurrency is a growing field in the international market. This is a case involving a Recognised Market Operator (RMO) and its account holder. In this case, this court is of the view that an intervention is needed as the business community cannot and would not thrive had such a heavier standard of duty of care is imposed on RMOs.

In the circumstances, and for the reasons above, this Court finds that there is merit in this appeal. Therefore, the decision of the Sessions Court is set aside. The defendant’s appeal is allowed with costs subject to allocator. Dated : 15 October 2024. Ditandatangani …..................................................... HAZIZAH KASSIM Judicial Commisioner High Court of Malaya At Shah Alam (NCvC 10) For the Appellant : Faisal Moideen, Clarence Tang & Maximilian Tai Tetuan Moideen & Max (Wilayah Persekutuan Kuala Lumpur) For the Respondent : Ong Yu Jian, Joshua Ho & Nurul Hanani binti Azamuddin Tetuan Chee Hoe & Associates (Wilayah Persekutuan Kuala Lumpur)