On the day of the emergency martial law declaration on December 3 last year, Upbit, Bithumb, and other exchanges decided to compensate investors a total of 3 billion won due to a system failure at the virtual asset exchange. This is the largest compensation amount related to virtual asset exchange system failures in history.
According to materials submitted by five virtual asset exchanges to Kim Hyun-jeong, a member of the Democratic Party of Korea and a member of the National Assembly's Political Affairs Committee, Upbit will compensate 3.144 billion won for 596 system failures that occurred on the day of the martial law. Bithumb also plans to compensate 377 million won for 124 system failures on the same day.
On December 3 last year, the price of Bitcoin at domestic exchanges plummeted from 130 million won to 88 million won when martial law was declared. User access to each exchange surged, causing transactions and access to be disrupted, and Upbit experienced failures that led to the cancellation of some withdrawals of virtual assets and deposits in won.
Discussions regarding compensation with investors are in the final stages, and once completed, the compensation amount may increase slightly. Coinone, Korbit, and Gopax reported no compensation issues. Upbit, the top virtual asset exchange, previously compensated 11.471 million won for 50 system failures in 2022. Bithumb compensated 9.495 million won to 29 people in 2023.
Financial authorities have begun on-site inspections related to exchange system failures since the 20th, following inspections last month. The Financial Supervisory Service received reports from exchanges regarding future measures, including server expansion, cloud transitions, and improvements to the Business Continuity Plan (BCP) after the declaration of martial law. This additional on-site inspection aims to monitor whether these measures are being implemented effectively.
Kim Hyun-jeong noted, "Although the number of virtual asset investors is surging, there is still a lack of institutional foundation for investor protection," adding, "Financial authorities and exchanges need to establish practical and specific measures, such as server expansion and BCP improvements, to create a safe and trustworthy virtual asset ecosystem."