A landmark court ruling against one of China’s largest bitcoin exchanges poses far-reaching ramifications in the country’s digital currency sector.

Last July 29, a Chinese civil court ordered the parent company of bitcoin exchange OKCoin, Lekuda, to pay up in connection with a 2014 case that Lekuda. In its lawsuit, defendant Huachen Commercial and Trading Co. Ltd. claimed it lost some $1.8 million to a fraud, who laundered the money by buying bitcoin, which was then withdrawn to an account in Macau.

The initial ruling awarded Huachen Commercial 80 percent of the damages, but the appeal reduced the amount to 40 percent.

In its appeals ruling, the Heilongjiang Provincial Higher People’s Court called out OKCoin for failing to strictly review its users “real identities.” The court said the person who defrauded Huachen Commercial was “able to set up a number of accounts on OKCOin using fraudulent identity documents purchased online.”