Bread & Kaya 2023 Pt2: The syariah court tackles crypto, the importance of experts in software disputes and online sexual grooming

If , dealing with Bitcoin, guidelines by Jawatankuasa Fatwa Negeri Selangor to been followed.
Never a defence for an accused&nbsp, to say that they&nbsp, did not know that the target is a baby

After revealing some striking situations yesterday, I now look at a few more ones that readers will undoubtedly find fascinating. I’ll give some advice on what to watch out for in 2024 cyber-related scenarios that might come up in court.

Possession of bitcoins in the Syariah Court

Mohd Nahar Bin Mohd Nasir is described in Rosmaliza Bin Mohamad Rosli Lwn ( Mahkamah Tinggi Syariah Shah Alam di Negeri Selangor ). .. Kes Mal Bil. : 10100-049-0757-2019 ), the plaintiff wife sought a declaration that Bitcoin amounting to 206.9967889 which is equivalent to RM10, 095, 109.20 to be a marriage debt between the plaintiff wife and defendant husband pursuant to s. 61 of the Administration of the Religion of Islam ( State of Selangor ) Enactment 2003, and that the Bitcoin be returned to the plaintiff wife.

The initial decision was made by the Syariah High Court, which authorized the hearing of the question of whether Cryptocurrency may be reclaimed as a marriage debt. The Court made a decision on” Hukum Matawang Kripto ( Cryptocurrency ): Satu Analisa Syarak” in relation to the” Keputusan Mesyuarat Jawatankuasa Fatwa Negeri Selangor yang&nbsp, telah bersidang pada 8 Muharram 1443H bersidang dengan 17 Ogos 2021″ decision.

“HARUS untuk menjalankan urus niaga menggunakan mata wang digital sama ada sebagai perantara pembayaran ( medium of payment ), pemindahan wang ( remittance ) &nbsp, dan aset simpanan SEKIRANYA memenuhi parameter-parameter di bawah. &nbsp,

a. &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, Urus niaga melibatkan mata wang online hendaklah dilakukan dapat system pertukaran mat wang online berlesen yang diluluskan dan dikawal selia by pihak berautoriti sahaja,

b. Pengguna hendaklah mempunyai pengetahuan yang inclusions mengenai &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, Pengguna hendaklah mempunyai pengetahuan

document. Jenis, ciri-ciri dalam jack risiko berkaitan mat wang online, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, ciri-ciri

i. &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, &nbsp, Perkara-perkara teknikal yang inclusions mengenai bagaimana for memperoleh mat wang online jack di mana ia perlu disimpan untuk memastikan keselamatannya,

ii. Peraturan-peraturan oleh ditetapkan by platform pertukaran mat wang online berlesen untuk diluluskan dan dikawal selia by pihak berautoriti, daniv. Undang-undang danny peraturan yang berkaitan mat wang online.

Sebagaimana mata wang yang lay, mat wang online hendaklah untuk digunakan sebagai bayaran kepada barangan, pelacuran, perjudian, pendanaan aktiviti keganasan serta penggubahan wang haram, according to c. &nbsp, &nbsp, &nbsp,

The Syariah High Court held that the requirements set forth in the Jawatankuasa Fatwa Negeri Selangor choice must be followed if one wants to deal with Bitcoin. &nbsp,

The plaintiff’s family must demonstrate that the plaintiff’s wife’s Bitcoin account adheres to the requirements set by the&nbsp, Jawatankuasa Fatwa Negeri Selangor, according to the Syariah High Court. She did not do it, either during the trials or in any of her petitions. As such, the Syariah High Court dismissed the activity. &nbsp,

Reduction of bitcoin

A respected market technician was also found to be answerable for negligence over the loss of Bitcoins by a person. In Petaling Jaya Sessions Court Suit No. Yew See Tak v. Luno Malaysia Sdn Bhd The claimant sued the accused, a documented market operator with a DAX license, for negligence for failing to secure and protect his cryptocurrencies, which are 2. 730096 Bitcoins worth RM566, RM570.70, in its possession and control.

The Cryptocurrencies were transferred to an unfamiliar profile in three distinct transactions but on a single time. The defendant claimed, among other things, that the illegal transactions were made possible through SMS sent to the defendant’s mobile number and through the plaintiff’s Luno account. Since the plaintiff had activated two-factor verification ( also known as two-factor authentication ), anyone who wants to get his Luno account must use the 2FA code generated by the 2FA program, Google Authenticator. The defendant concluded that there was nothing to demonstrate that his finances was compromised, and the transactions were inevitable due to Blockchain systems.

The plaintiff claimed that he had given Luno the task of keeping and caring for the funds and cryptocurrencies in the Luno account and that he had opened an account with them to be able to employ its functions properly and safely. Thus, the respondent and the plaintiff had a professional relationship with the claimant as its customer.

The Court found that the defendant had been irresponsible and awarded standard, aggravated and excellent restitution of RM100, 000.00.

The defendant’s customer support was hampered by the defendant’s 36 hours-long delay in letting the plaintiff know his account had been locked out for security reasons, the jury determined. This demonstrates that the defendant did not take the issue seriously. The customer service personnel even did not speak to present the role and responsibilities taken by the plaintiff in handling issues submitted by their clients. The respondent may correct the issue within a reasonable amount of time to resolve the issue being raised.

The plaintiff’s program should have been notified and the dubious deals identified. This is a situation involving a large amount in two dealings in a short time. The claimant has been a 5-year customer for five years, not a new client. The accused can interpret and forecast the plaintiff’s interpersonal pattern. The defendant don’t avoid liability by merely implementing a 2FA system.

Additionally, the accused developed a new fraud prevention strategy to restrict transactions made through the platform following the plaintiff’s event. With this plan, the defendant may determine whether there are transactions that are abnormally high or above the permitted level, and if they are abnormal, they will be suspended or looked into. In contrast, the Court recognised that other websites may stop suspicious transactions and the plaintiff failed to do so.

The defendant also allegedly violated the Securities Commission’s Guidelines on Prevention of Money Laundering and Terrorism Financing for Capital Market Intermediaries. Not only did the defendant not report the incident to the Securities Commission.

A reporting institution is required to conduct ongoing due diligence and scrutiny of its customers throughout the life of the business relationship, according to the Guidelines. Such measures shall include monitoring and detecting patterns of transactions undertaken throughout the course of the business relationship to ensure that the transactions being conducted are consistent with the reporting institution’s knowledge of the customer. Additionally, it ought to think about changing a customer’s risk classification and requesting a suspicious transaction report from Bank Negara Malaysia’s Financial Intelligence and Enforcement Department.

The Court took into account the following in terms of the general, aggravated, and exemplary damages:

the defendant’s position that its security measures are very good and anything more is not their problem but nevertheless admitted that there was improvement in the security after the incident,
The defendant could at least offer a thorough and urgent investigation, and transactions in such an account should be stymied or frozen until the investigation is finished.
the plaintiff had firmly believed in the defendant and had made an investment there.
the plaintiff could have continued with his investment into cryptocurrencies but for the loss of the cryptocurrencies.

However, the High Court overturned the appeals court ruling from the Sessions Court. The learned High Court Judge reportedly believed that the Sessions Court judge had imposed a high standard of care and duty on Luno despite the lack of supporting evidence. The High Court’s grounds are not available as at the time of writing.

Online grooming

Online sexual grooming was also affected by the Sexual Offences Against Children Act 2017 ( SOLACT). In Hendra Bin Mulana v Pendakwa Raya]2023] CLJU 2230, the Court showed its abhorrence towards child sexual abuse materials and child grooming. The accused was found guilty of four counts of child pornography under the Sexual Offenses Against Children Act 2017 and given a 13-year sentence, three strokes of rotan ( caning ), for each charge, by the Sessions Court.

The accused had arranged for the victim to give him sexual-related photos and videos and had lewd conversations with her on a social media platform by the name of BIGO. The accused however had never met the victim, but they had communicated via live streaming and WhatsApp calls.

Because of her BIGO profile, which stated she was 19 years old, the accused’s defense claimed that he had no idea what the victim’s true age was. He added that the victim claimed to have been informed that she was still in school and that she was enrolled in Form Six ( Upper ). The accused argued that he had taken all reasonable steps to ascertain the age of the victim and relied on the defence under section 20 of the Sexual Offences Against Children Act 2017. The victim acknowledged that she had informed the accused that she was 14 years old but did not disclose her true age. Her friend’s account was the BIGO account.

The High Court held that there were two ingredients to be fulfilled for an offence under section 8 ( b ) by the prosecution and they were that the victim is a child, and the accused had asked for pornography from the child at the material time. The Sessions Court ruled that the High Court had made an error by holding that both requirements were met. In terms of the first ingredient, it was satisfied by the availability of the victim’s birth certificate. As for the second ingredient, this was fulfilled through the evidence provided by the prosecution witness, the accused’s own statements and documentary evidence.

The accused defense claimed that he did not know the victim’s true age. The Sessions Court rejected this claim, holding that the accused should have made an effort to meet the victim in person to find out her true age. Pursuant to section 20 of the Sexual Offences Against Children Act 2017, it is not a defence for the accused to claim that he did not know that the victim is a child unless the accused took all reasonable steps to ascertain the age of the person.

The High Court concurred with the Sessions Court and remarked that the victim’s photo clearly demonstrates that she is a young person. The accused should have tendered evidence to support his claims that he had taken reasonable steps to determine the victim’s age. As such, the High Court upheld the conviction of the Sessions Court but reduced the sentence from 13 years for each charge to 10 years each. The High Court’s conviction and sentence were upheld by the Court of Appeal.

Software Dispute

The High Court case of Liberty Technology Resources Sdn Bhd v. Suruhanjaya Syarikat Malaysia ( SSM)]2023] 1 LNS 1294 highlights the importance of terms on refund and liquidated damages, and role of experts in software disputes.

The litigant was tasked with creating an ERP system for Suruhanjaya Syarikat Malaysia ( the defendant ) under the terms of a contractual agreement known as the ERP Agreement. Due to delays in the project’s completion, the defendant abruptly terminated the agreement, which both parties then brought to court.

The plaintiff alleged wrongful termination and sought significant contractual payments, primarily for third-party software licenses and subscription fees purchased on behalf of the defendant. However, the court determined that the ERP Agreement did not specifically mandate that the plaintiff be required to pay for the acquisition of third-party software at its own expense unless otherwise specified in the contract. Therefore, the plaintiff’s request for reimbursement of these costs was rejected.

Regarding the delays in project completion, the plaintiff argued that these were caused by actions of the defendant. The court noted, however, that this assertion was unsupported by any compelling evidence, such as expert reports or thorough delay analyses. In consequence, the plaintiff was unable to establish the defendant’s guilt in light of their wrongful termination claim.

On the defendant’s counterclaim, seeking a refund of payments made under the ERP Agreement upon termination, the court ruled in favor of defendant. Based on solid contractual terms that allowed for such refunds in the event of termination, this decision was made. Additionally, the court upheld the defendant’s right to liquidated damages, separate from the refund, as well as those that were deemed necessary to make up for losses brought on by project delays.

Throughout the case, expert opinions played a significant role. The plaintiff uncontested the expert analysis regarding the causes of project delays that the defendant presented. This further supported the court’s decision in favor of the plaintiff on matters involving termination, refunds, and damages.

Closing

In 2024, we can expect more interesting developments in the cyberlaw and IT sphere.

During the Parliament’s session in July 2024, our government proposed changes to the Personal Data Protection Act 2010. The new regulations now require data controllers to comply with the requirements of a data protection officer, notification of data breaches, and the right to transfer personal information to another data controller, including data portability.
Singapore may require online platforms Carousell and Facebook to verify the identity of all their sellers if the number of scams reported on the respective platforms does not drop significantly. The Singapore government made a welcome effort to stop scam, which should follow our government’s example.
New laws are being passed to combat scams by making a severe dent in those who operate mule accounts, according to the issue of scams. Currently, mule account holders are charged under s. 414 ( assisting in the concealment of stolen property ) and s. 424 ( dishonest or fraudulent removal or concealment of consideration ) of the Penal Code, among others. The new proposed changes will now make someone who has a payment instrument or account of another person in his or her possession ( s. 424A ), gives possession of the same ( s. 424B), and engages in transactions related to the same ( s. 424C ) illegally in his or her possession or control ( s. 424A ).
By January 1st, 2025, social media service providers and instant messaging service providers with 8 million or more users in Malaysia must comply with the Communications and Multimedia Commission’s ( Exemption ) ( Amendment ) Regulations 2024 and Communications and Multimedia ( Licensing ) ( Exemption ) ( Amendment ) ( No 2 ) Regulations 2024. This requirement was introduced to combat rise in cybercrime offences including online scams and gambling, cyberbullying, and sexual crimes against children.