- The declaration of Martial law in South Korea on December 3, 2024, caused chaos for crypto exchanges like Upbit and Bithumb.
- The crypto exchanges experienced downtimes as investors rushed to manage their assets.
- Upbit and Bithumb have agreed to compensate for service disruptions.
President Yoon Suk Yeol’s declaration of martial law on December 3, 2024, led to significant disruptions across various sectors, including the cryptocurrency market.
President Yoon Suk Yeol’s televised announcement was a response to escalating political tensions, causing widespread panic among the populace. This fear translated into a massive surge in trading activity on local cryptocurrency exchanges, as investors scrambled to manage their assets amidst the uncertainty.
This sudden spike in trading volume overwhelmed the servers of key cryptocurrency platforms like Upbit and Bithumb.
Upbit, which typically manages around 100,000 concurrent users, found itself catering to an unprecedented 1.1 million users. Similarly, Bithumb and another exchange, Coinone, also saw their user numbers balloon to over 500,000 each, pushing their systems beyond capacity.
The result was significant service outages. Upbit experienced nearly two hours of downtime, while Bithumb managed slightly over an hour, and Coinone faced about 40 minutes of disruption.
These outages left investors unable to access their funds or execute trades at a critical time, leading to considerable inconvenience and potential financial loss.
Upbit and Bithumb has committed $2.5M for compensation
Recognizing the impact on their users, Upbit and Bithumb have now committed to compensating those affected.
Upbit has agreed to pay out 3.14 billion South Korean won, approximately $2.1 million, to address 596 cases related to the service interruption.
Bithumb, on the other hand, will distribute 377.5 million won, or about $262,000, to deal with 124 cases.
These compensations mark one of the largest payouts by cryptocurrency exchanges in South Korea’s history, reflecting the severity of the situation.
The aftermath of the martial law outages has prompted South Korea’s financial regulators to take action. On-site inspections have resumed to ensure that exchanges are improving their infrastructure. Measures like server expansion, transitioning to cloud services, and refining emergency response plans are now priorities to prevent future service disruptions.
