Author
Tim Alper
Author
Tim Alper
Share
The South Korean crypto exchange Bithumb says it will compensate customers who were affected by an outage that took the platform offline for about 100 minutes on September 2.
The South Korean newspaper Seoul Kyungjae reported that the platform went down “suddenly” at 11:27 PM KST on September 2.
Bithumb confirmed computer system-related problems caused the disruption, rather than an external hacking attempt.
Bithumb Outage: What We Know
The exchange explained that order executions were delayed, with its order book frozen. Bithumb said that its engineers “immediately began system maintenance” after detecting the fault.
However, Bithumb “trading services were down for approximately 1 hour and 40 minutes,” the newspaper explained.
Bithumb announced September 3 that it would “fully compensate users for losses incurred due to the trading suspension.”
The exchange said it now plans to “sequentially review” customer complaints and provide compensation for traders who lost money as a result of the outage.
Bithumb said it hopes to complete the review and compensation process in the space of “approximately one month.”
An exchange official said a transaction system error caused the problem. Bithumb said: “The outage was not caused by external factors like hacking. We are analyzing the details of this technical error to ensure this does not happen again.”
Do South Korean Exchanges Need to Shore up Their Systems?
The newspaper said customers had suffered “significant disruption.” This follows major system errors at South Korea’s biggest exchanges during last year’s martial law crisis.
Crypto markets experienced turmoil in early December 2024, after former President Yoon Suk-yeol attempted to declare martial law.
Some traders responded by selling their crypto holdings, while others attempted to “buy the dip.”
The result was a massive and sudden surge of web traffic to major exchanges, with many platforms seemingly unable to take the strain.
“Repeated computer outages at major exchanges are fueling investor discontent,” Seoul Kyungjae wrote.
We Must Improve Legal System, Say Industry Officials
Data compiled by the offices of the People Power Party lawmaker Lee Heon-seung has revealed that 89 cases of outages occurred at the country’s five fiat-trading exchanges from 2018 to 2024.
Bithumb has experinced 41 of these outages, with its closest rival Upbit experiencing 28 cases. GOPAX has suffered from 11 outages in the period, with Coinone reporting eight cases. Korbit experienced just one system-related outage between 2018 and 2024.
The newspaper bemoaned the fact that South Korea currently has no industry-wide legal compensation standards. As such, deadlines for reporting damages and compensation methods currently “vary greatly from exchange to exchange.”
The newspaper quoted an unnamed South Korean crypto industry official as stating:
“The crypto market is highly volatile and operates 24 hours a day. As such, even a few minutes of trading interruption can result in investors making losses. We need to create a streamlined compensation system for damages caused by exchanges’ computer system failures.”
Bithumb is aiming to go public on the NASDAQ stock exchange in 2026. It has recently launched a spinoff company as part of its bid. This, Bithumb claims, has allowed it to divide its core exchange operations from its new business arm.
Credit: Source link
