Michaela Alvez
South Korean cryptocurrency exchanges Upbit and Bithumb have pledged the largest-ever user compensation in the country’s crypto history, addressing losses caused by platform disruptions during the recent martial law declaration.
On December 3, 2024, trading volumes spiked as Bitcoin prices fell following the announcement of martial law in South Korea. According to local newspaper Maeil Ilbo, South Korean crypto exchanges have reached an agreement to compensate users a total of 3.5 billion won (approximately $2.4 million) for 720 affected cases.
Per reports submitted to the National Assembly, Upbit will compensate more than 3.14 billion won for 596 cases, while Bithumb plans to pay 377 million won for 124 cases. Both exchanges are still in discussions with affected users to finalize the details, suggesting that the total payout could rise slightly.
Following the martial law announcement, Upbit saw its user base surge from 100,000 to over 1.1 million in a short period, leading to 99 minutes of downtime. Bithumb faced 62 minutes of disruption during the same period. As a result, many users were unable to trade or withdraw their funds, suffering losses as Bitcoin prices plummeted.
According to the report, financial regulators are closely monitoring the progress of exchanges as they implement promised upgrades. These include enhanced servers and improved emergency response plans. A representative from the Financial Supervisory Service (FSS) stated that they are ensuring exchanges follow through on these commitments and effectively address user complaints.
South Korean Martial Law Affects Local Crypto Industry
South Korea’s unexpected declaration of martial law sent shockwaves through both domestic and global financial markets. This instability intensified during a critical period when Bitcoin and other cryptocurrencies, including XRP, were experiencing significant price fluctuations.
Beyond the immediate market turbulence, the South Korean martial law declaration also intensified scrutiny of the country’s regulatory environment for digital currencies. The incident highlighted gaps in the preparedness of exchanges to handle unexpected political or regulatory shifts, and the vulnerability of the crypto ecosystem in such unpredictable situations.
Analysts and traders alike were left to question the long-term impact on investor confidence in South Korea’s crypto market, especially as the country’s political landscape seemed uncertain.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
