Blackout Backlash: Upbit & Bithumb Settle with $2.4M Compensation

Leading South Korean cryptocurrency exchanges Upbit and Bithumb have agreed to compensate customers with a combined payout of $2.4 million following a major service disruption known as the ‘Martial Law Blackout.’ This compensation aims to address the financial losses incurred by users during the unexpected outage.

The Blackout Incident

The service disruption, which occurred during a period of heightened market activity, left thousands of users unable to access their accounts or execute trades. The blackout caused widespread frustration among investors, leading to demands for compensation and regulatory scrutiny.

“We acknowledge the inconvenience caused to our valued customers and are committed to ensuring such incidents do not occur in the future,” an Upbit spokesperson stated.

Compensation Breakdown

The $2.4 million compensation package will be distributed among affected users based on the severity of their losses during the outage. Eligible users can expect:

• Direct Reimbursements: Compensation for unrealized gains and trading losses.
• Fee Waivers: Discounts on future trading fees as an additional gesture of goodwill.
• Enhanced Customer Support: Priority assistance for affected users in future transactions.

Regulatory and Public Response

The compensation agreement follows pressure from regulatory authorities and mounting public criticism. The Financial Supervisory Service of South Korea has urged exchanges to implement stronger safeguards to prevent similar incidents in the future.

Crypto industry analysts see this compensation move as a positive step toward greater accountability and transparency within the South Korean cryptocurrency market.

Both Upbit and Bithumb have pledged to invest in upgrading their infrastructure to ensure improved system stability and better user experience. Additionally, they are working closely with regulators to enhance compliance measures and avoid potential operational disruptions.

In conclusion, the settlement marks a significant moment for South Korean crypto exchanges, emphasizing the importance of user trust and regulatory cooperation in the rapidly evolving digital asset landscape.