South Korean crypto exchanges Upbit, Bithumb have agreed to compensate users with the largest payout ever following system failures caused by the martial law declaration.
Upbit and Bithumb, two South Korean crypto exchanges, have agreed to compensate users for technical failures that occurred during the martial law declaration in December, Korean news agency Yonhap reports. Combined, they will pay out over 3.5 billion won (around $2.5 million) in what is being called the largest compensation in South Korea‘s crypto history.
According to reports submitted to the National Assembly, Upbit is set to compensate over 3.14 billion won for 596 cases, while Bithumb will pay 377 million won for 124 cases. Both exchanges are finalizing talks with users, meaning the final payout might increase slightly.
The system went down when the sudden martial law announcement caused a huge traffic spike. Upbit’s user count jumped from 100,000 to over 1.1 million in no time, causing 99 minutes of downtime. Bithumb wasn’t immune either, with 62 minutes of disruption. During the incident, some users couldn’t trade or withdraw funds, losing big as Bitcoin’s (BTC) price dropped.
Financial authorities are keeping an eye on how exchanges are following through with their promised upgrades, like bigger servers and better emergency plans. A Financial Supervisory Service official said they’re making sure exchanges stick to these changes and properly handle user complaints, according to the report.
Meanwhile, regulators are still digging into Upbit over alleged money laundering issues, piling on the pressure for the industry to step up its compliance game. Earlier in January, the Financial Intelligence Unit warned Upbit it could face a suspension for not meeting KYC and AML rules.
The FIU sent Upbit a notice on Jan. 9, warning it could be hit with a suspension of up to six months. During that time, Upbit won’t be able to take on new customers, but existing users can keep trading. The exchange has until Jan. 20 to respond to the FIU’s claims.
