CRYPTOCURRENCY EXCHANGES EXPERIENCE PROBLEMS

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Korea’s two largest cryptocurrency exchanges, Upbit and Bithumb, experienced computer problems that caused trading shutdown for more than an hour yesterday. The exchanges claimed that a spike in traffic caused the disruption, but their bulletin boards were flooded with customers complaining of losses.

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At around 10 am Tuesday local time, trading at Upbit, South Korea’s largest cryptocurrency exchange was suspended. Computer errors such as delayed postings of cryptocurrency rates continued for more than an hour. About five hours earlier, the nation’s second largest crypto exchange, Bithumb also experienced a similar problem for about an hour and 40 minutes. Bulletin boards were flooded with investors complaining that they lost money because they couldn’t trade in time.

[Soundbite] Hong Ji-yun(Cryptocurrency Investor) : "I lost a lot of money because I was unable to respond to the market."

Similar problems occurred at these exchanges back in February. The exchanges evaded taking responsibility, claiming that a spike in trading volume caused traffic overload.

[Soundbite] (Cryptocurrency Exchange Official(VOICE MODIFIED)) : "The daily trading volume reaches several trillion won. If there weren’t enough servers, trading would not take place at all. We weren’t negligent or non-responsive yet the trouble still occurred."

The issue is that it is not easy for investors to be compensated even when they lose money due to such errors at the exchanges. The terms and conditions of major cryptocurrency exchanges are not advantageous to users, stipulating damage compensation only when an exchange made intentional or unintentional mistakes or when an administrator failed to exercise due diligence.

[Soundbite] Lee Han-sang(Prof. Korea Univ. Business School) : "How can an individual user prove that? So it’s a useless stipulation and a boilerplate clause meant to protect themselves."

The daily trading volume at the country’s four largest cryptocurrency exchanges stand at roughly 25 trillion won, much more than that of the Korean stock exchanges. However, many experts point out there's insufficient transaction system stability or investor protection measures, especially considering their trading volume.