Compensation of 3.16 Billion Won by Upbit and 500 Million Won by Bithumb Due to System Failures on Martial Law Day

Korea Economic Daily

Summary

Upbit decided to compensate 3.16 billion won, and Bithumb decided to compensate 500 million won.
The Financial Supervisory Service reported that the cause of system failures at Upbit and Bithumb was due to insufficient server capacity.
Both exchanges announced that they have significantly improved their simultaneous user capacity compared to before martial law through server expansion.

Financial Supervisory Service: "The cause of system failures during martial law is insufficient server capacity"

During the martial law situation, Upbit, Bithumb, and other major virtual asset exchanges experienced system failures. Upbit decided to compensate investors with 3.16 billion won, and Bithumb with 500 million won.

The Financial Supervisory Service announced on the 6th that it held a meeting with the CEOs and CTOs of five virtual asset operators, including Dunamu, Bithumb, Korbit, Coinone, and Streami, as well as the Digital Asset eXchange Alliance (DAXA), to examine the causes of recent system failures in virtual asset operators and discuss countermeasures.

The Financial Supervisory Service explained that after conducting two on-site inspections of virtual asset operators that experienced system failures immediately after martial law, it was confirmed that the main cause of the system failures at the three major exchanges—Upbit, Bithumb, and Coinone—was insufficient server capacity due to traffic concentration.

To prevent recurrence, the Financial Supervisory Service stated that it has completed the expansion of servers and other equipment, and plans to implement improvements and address deficiencies within the first half of the year. As a result of the expansion, the capacity for simultaneous users at each exchange increased from 500,000 to 900,000 for Upbit, from 100,000 to 360,000 for Bithumb, and from 100,000 to 500,000 for Coinone compared to before martial law.

Regarding the system failures on the day of martial law, Upbit decided to compensate 604 out of 1,135 compensation claims, amounting to 3.16 billion won, and Bithumb decided to compensate 154 out of 187 claims, amounting to 500 million won. Coinone decided to exclude both of its compensation claims from compensation.

The Financial Supervisory Service pointed out that Upbit needs to ensure consistency in the method of calculating compensation, and although Bithumb and Coinone have internal regulations and manuals for compensation in case of trading errors, the details need to be specified.

Hye-won Ahn, Hankyung.com journalist anhw@hankyung.com