Nikolas Sargeant
South Korea's largest crypto exchanges, Upbit and Bithumb, have agreed to compensate customers with $2.4 million for critical service disruptions during the December 3 martial law crisis, marking an unprecedented response to systemic trading failures.
According to data from Democratic Party lawmaker Kim Hyun-jung, Upbit will pay 3.1 billion won ($2.2 million) covering 596 individual cases of platform failures. Bithumb will contribute an additional 377 million won ($263,273) for 124 separate cases.
This compensation represents the largest payout by domestic exchanges, addressing widespread customer impact during a tumultuous market event.
Market Disruption Context
President Yoon Seok-yeol's martial law declaration triggered significant market volatility. Bitcoin prices dramatically plummeted from 130 million won to 88 million won, causing widespread panic and unprecedented trading platform stress.
The sudden market shock overwhelmed exchange infrastructures. Users reported numerous issues, including:
- Complete inability to log into accounts
- Transaction execution failures
- Cancelled cryptocurrency withdrawals
- Interrupted won (KRW) deposit processes
Regulatory Intervention
The Financial Supervisory Service (FSS) has launched comprehensive on-site inspections, demanding exchanges:
- Expand server infrastructure
- Enhance cloud service capabilities
- Develop robust emergency response protocols
Lawmakers like Kim Hyun-jung emphasize the urgent need for stronger investor protection mechanisms and more resilient digital asset trading ecosystems.
Future Implications
The compensation effort signals a critical moment for South Korean cryptocurrency markets, highlighting the growing need for technological reliability and customer safeguards in an increasingly volatile digital financial landscape.
