Upbit, Bithumb to pay largest ever compensation for system failures during martial law

South Korean crypto exchanges Upbit and Bithumb have agreed to compensate users with the largest payout ever following system outages caused by the declaration of martial law.

Upflow And Bithumbtwo South Korean crypto exchanges, have agreed to compensate users for technical outages that occurred during the declaration of martial law in December, according to Korean news agency Yonhap. reports. Together, they will pay more than 3.5 billion won (about $2.5 million) in what is considered the largest compensation on record. South Koreathe history of cryptography.

According to reports submitted to the National Assembly, Upbit is expected to compensate more than 3.14 billion won for 596 cases, while Bithumb will pay 377 million won for 124 cases. Both exchanges are finalizing negotiations with users, which means the final payout could increase slightly.

The system crashed when the sudden announcement of martial law caused a huge surge in traffic. Upbit’s user count grew from 100,000 to over 1.1 million in no time, causing 99 minutes of downtime. Bithumb was not immune either, with 62 minutes of disruption. During the incident, some users were unable to trade or withdraw funds, losing as much as Bitcoin (BTC) the price has fallen.

Financial authorities are monitoring how exchanges implement promised upgrades, such as bigger servers and better contingency plans. An official from the Financial Monitoring Service said it was ensuring that exchanges respected these changes and properly handled user complaints, according to the report.

Meanwhile, regulators continue to look into Upbit for alleged money laundering issues, putting pressure on the industry to step up its compliance game. Earlier in January, the Financial Intelligence Unit warned Upbit could face suspension for non-compliance with KYC and AML rules.

The FIU sent Upbit a notice on January 9, warning that it could face a suspension of up to six months. During this time, Upbit will not be able to attract new customers, but existing users will be able to continue trading. The exchange has until January 20 to respond to the FIU’s claims.