- Bithumb will compensate users affected by a 100-minute service disruption on Tuesday.
- South Korea’s top five exchanges have reported 89 outages since 2018.
- Bithumb is already under scrutiny for misleading fees, security concerns, and risky lending practices.
South Korean crypto exchange Bithumb will compensate users for a 100-minute outage that rendered the platform unusable late Tuesday.
Bithumb said it would offer compensation to affected customers in accordance with the Korea Digital Asset Exchange Alliance’s guidelines, according to several local media reports.
Notably, users who faced unexecuted low-limit buy orders and failed attempts to cancel low-limit sell orders that may have led to unintended transactions would be considered for compensation.
Not an isolated incident in South Korea
Although the company has refrained from disclosing the technical details behind the service disruption, citing internal security concerns, it stressed that all emergency maintenance procedures had been completed and pledged to address any damage incurred as a result.
The outage, which began around 9:40 p.m. local time, left users unable to trade or modify orders for over an hour and a half.
Some investors took to online communities to vent their frustration, with one describing the experience to The Korea Times as a “taste of hell.”
“My thought that night was: Beginners should never go all-in with their money. I just had a taste of hell. One minute felt like an hour,” they were quoted as saying.
At the same time, many complained they were caught off guard during short-term trades and were unable to exit positions during volatile price movements.
These kinds of disruptions are especially painful in crypto markets, where round-the-clock trading leaves little room for error or downtime.
For South Korean crypto traders, the frustration stretches beyond just Bithumb. Data presented by lawmaker Lee Hun-seung earlier this year revealed that Korea’s five major exchanges logged a total of 89 technical failures between 2018 and 2024, 41 of which were reported by Bithumb alone.
Collectively, the platforms paid out nearly $2.74 million in compensation, with the bulk of it, around $2.3 million, coming from Upbit.
Bithumb’s share of the compensation pool was estimated to be approximately 660 million won, while other platforms like Coinone, Korbit, and GOPAX reportedly paid nothing.
Despite repeated calls from lawmakers and industry observers for tougher oversight, crypto exchanges in Korea are still not held to the same standards as securities firms, which are legally obligated to compensate users for infrastructural failures.
As a result, this regulatory grey area allowed these businesses to define their own rules for handling claims, often leaving retail users without recourse in edge-case scenarios.
Bithumb users can’t catch a break
Just five months ago, in April, Bithum users were rattled after the exchange issued a security warning following a major data breach at SK Telecom, South Korea’s largest mobile carrier.
Although Bithumb was not directly impacted, and it had to amp up its security measures in response, users were once again left scrambling to protect their assets.
Even as the exchange tries to move toward a brighter future, including a proposed corporate restructure and a possible Nasdaq IPO, Bithumb continues to find itself mired in controversy.
Earlier this year, Bithumb was accused by a lawmaker of deploying “dark patterns” to mislead users about trading fees, allegedly earning over 140 billion won in extra charges.
Those allegations eventually sparked calls for intervention by South Korea’s Fair Trade Commission and the Financial Services Commission.
Regulators have also scrutinized Bithumb for offering up to 4x leverage on its crypto lending service due to concerns over excessive investor risk, and it ultimately slashed the ratio to 2x while capping loan limits by 80%.
While Bithumb did bounce back financially with over 130 billion won in operating profit last year, its reputation among users continues to take repeated hits.
