A senior executive at Kakao, South Korea's leading internet conglomerate, has filed a lawsuit against GroundX, its blockchain subsidiary, seeking KRW 10 billion ($7.6 million). This lawsuit follows a crypto hack in March 2022 that compromised the executive’s Klip wallet, which is integrated into KakaoTalk, South Korea’s top messaging app. Hackers accessed the executive's KakaoTalk account, transferred the stolen cryptocurrency to overseas exchanges, and made it difficult to recover the funds.
The executive accuses GroundX of failing to implement sufficient security measures to prevent the breach. This lawsuit brings attention to the growing security concerns surrounding crypto wallets, particularly those integrated into popular platforms. Klip, built on the Klaytn blockchain developed by GroundX, is a key part of Kakao's blockchain ecosystem, enabling users to manage cryptocurrencies and NFTs.
Despite the breach, Kakao continues its blockchain efforts but faces scrutiny over its security infrastructure. GroundX's ongoing role in Kakao's Web3 and NFT initiatives could be jeopardized depending on the outcome of the lawsuit. This case underscores the need for stronger cybersecurity in the rapidly evolving crypto industry.