The Impact of Martial Law on South Korean Crypto Exchanges
Chaos in the Crypto Market
- The declaration of Martial law in South Korea on December 3, 2024, caused chaos for crypto exchanges like Upbit and Bithumb.
- Investors rushed to manage their assets, leading to downtimes on the exchanges.
- Upbit and Bithumb have agreed to compensate for the service disruptions.
President Yoon Suk Yeol’s declaration of martial law on December 3, 2024, resulted in significant disruptions in various sectors, including the cryptocurrency market.
The announcement triggered panic among the populace, leading to a surge in trading activity on local cryptocurrency exchanges as investors tried to navigate the uncertainty.
Service Outages and Compensation
The increased trading volume overwhelmed the servers of key platforms like Upbit and Bithumb, causing significant service outages:
- Upbit experienced nearly two hours of downtime.
- Bithumb faced slightly over an hour of disruption.
- Coinone dealt with about 40 minutes of outage.
Compensation by Upbit and Bithumb
Recognizing the impact on users, Upbit and Bithumb have committed to compensating those affected:
Upbit will pay out 3.14 billion South Korean won (approximately $2.1 million) to address 596 cases related to the service interruption.
Bithumb will distribute 377.5 million won (about $262,000) to deal with 124 cases.
These compensations mark one of the largest payouts by cryptocurrency exchanges in South Korea’s history.
Regulatory Response and Future Plans
The aftermath of the martial law outages has prompted South Korea’s financial regulators to take action:
- On-site inspections have resumed to ensure exchanges are improving their infrastructure.
- Measures like server expansion, transitioning to cloud services, and refining emergency response plans are priorities to prevent future disruptions.