- The declaration of martial law in South Korea on December 3, 2024, caused chaos for cryptocurrency exchanges such as Upbit and Bithumb.
- Crypto exchanges experienced outages as investors rushed to manage their assets.
- Upbit and Bithumb agreed to compensate users affected by the service interruptions.
The declaration of martial law by President Yoon Suk Yeol on December 3, 2024, triggered significant disruption across multiple sectors, including the cryptocurrency market.
The televised announcement by President Yoon responding to escalating political tensions prompted widespread public alarm. That fear translated into a sharp surge in trading activity on local crypto exchanges, with investors scrambling to secure or rearrange their holdings amid uncertainty. The sudden spike in traffic overwhelmed the servers of major platforms such as Upbit and Bithumb.
Upbit, which typically handles around 100,000 concurrent users, faced an unprecedented load of approximately 1.1 million simultaneous users. Likewise, Bithumb and another exchange, Coinone, each saw user counts rise past 500,000, pushing their systems beyond intended capacity. The immediate result was prolonged service outages.
Upbit experienced nearly two hours of downtime, while Bithumb managed just over an hour, and Coinone suffered about 40 minutes of interruption. These outages prevented many investors from accessing funds or executing trades at a critical moment, causing significant inconvenience and potential financial losses.
Upbit and Bithumb commit $2.5 million for compensation
Recognizing the impact of the outages on customers, Upbit and Bithumb pledged compensation to affected users. Upbit agreed to pay 3.14 billion South Korean won (approximately $2.1 million) to resolve 596 claims related to the service disruptions. Bithumb announced it would distribute 377.5 million won (about $262,000) to address 124 cases. These payouts represent some of the largest compensation settlements by cryptocurrency exchanges in South Korea’s history and underscore the severity of the disruptions.
The fallout from the martial law-related outages prompted South Korean financial regulators to take action. On-site inspections resumed to verify that exchanges are strengthening their infrastructure and operational readiness. Prioritized measures include expanding server capacity, accelerating migration to cloud services, and refining emergency response plans to reduce the risk of future service interruptions. Regulators and exchanges alike emphasized the need for improved resilience to protect investors and maintain market stability.