The U.S. Securities and Exchange Commission (SEC) has secured a partial victory in its ongoing legal battle with Kraken, the cryptocurrency exchange, after a California federal judge dismissed one of Kraken’s central defenses. The case revolves around allegations that Kraken offered unregistered securities, violating federal securities laws.
Judge Rejects Kraken’s Major Questions Doctrine Defense
On Jan. 24, Judge William Orrick ruled to dismiss Kraken’s argument based on the “major questions doctrine.” This defense claimed that the SEC was overstepping its authority by attempting to regulate the cryptocurrency market, a sector that Kraken argued Congress had not explicitly granted the agency power over.
Judge Orrick, however, found that the SEC was not asserting “highly consequential power beyond what Congress could reasonably be understood to have granted it.” He added that while cryptocurrency is a growing financial instrument, its current economic significance does not rival sectors like energy or student loan markets, which are often cited in major questions doctrine cases.
The major questions doctrine has been a popular defense among crypto firms like Coinbase, Ripple, and Binance in similar cases. It asserts that federal agencies cannot wield powers not explicitly delegated to them by Congress. Judge Orrick’s decision to reject this argument against the SEC could have implications for other cases involving crypto companies.
Fair Notice Defense Still in Play
While the judge struck down Kraken’s major questions doctrine argument, he allowed the exchange to proceed with its “fair notice” defense. Kraken had argued that the SEC failed to provide adequate notice that its activities violated securities laws, potentially infringing on its due process rights.
“The SEC would have to show that any ordinary entity in Kraken’s position would understand that the Howey test, as applied to the secondary market transactions on Kraken’s platform, establishes that those transactions are investment contracts,” Judge Orrick stated. “It has not made such a showing.”
The Howey test, a legal standard for determining whether a transaction qualifies as an investment contract, has been a cornerstone of the SEC’s enforcement strategy against crypto firms. However, the lack of clear regulatory guidance has been a recurring complaint from industry participants.
Background on SEC Enforcement Actions in Crypto
The SEC has ramped up enforcement actions against the cryptocurrency sector in recent years, targeting exchanges, token issuers, and other entities it claims are operating outside the bounds of securities laws.
Under the leadership of Chair Gary Gensler, the agency has taken a more aggressive stance, filing lawsuits against major players like Coinbase, Ripple, and Binance. These actions often revolve around accusations of offering unregistered securities or operating as unregistered securities exchanges.
However, the SEC’s approach has sparked controversy. Critics, including Commissioner Hester Peirce—known for her pro-crypto stance—have argued that the agency’s tactics create uncertainty and stifle innovation. In response, the SEC established a specialized crypto task force to address the unique challenges posed by digital assets, but the industry continues to call for clearer regulatory guidelines.
Timeline of the Kraken Lawsuit
The SEC filed its lawsuit against Kraken in November 2023, alleging that the exchange had been operating as an unregistered securities exchange since 2018. The suit also accused Kraken’s parent companies, Payward Inc. and Payward Ventures, of violating federal securities laws.
Kraken’s initial attempt to have the case dismissed was denied by a U.S. federal court in August 2024. The exchange responded with a formal dispute of the SEC’s allegations in a September filing, raising several defenses, including the major questions doctrine and the fair notice argument.
The current ruling marks a critical moment in the case, as the dismissal of the major questions doctrine defense weakens Kraken’s position. However, the survival of the fair notice defense ensures that key questions about regulatory clarity will remain central to the case.
Musk Fuks Robots could turn early investors into multi-millionaires, like other memecoins, such as Shiba Inu (SHIB) and Dogecoin (DOGE), did.
Musk Fuks Robots (MUSKROBO), a Solana memecoin launched today, is set to explode over 18,000% in price in the coming days.
This is because MUSKROBO is set to soon be listed on numerous crypto exchanges, according to reports.
This will give the Solana memecoin exposure to millions of additional investors, who will pour funds into the coin and cause its price to rally, which will benefit investors who buy before these new exchange listings.
Currently, Musk Fuks Robots can only be purchased via Solana decentralized exchanges, like Jup.ag and Raydium.io, and early investors stand to make huge returns in the coming days.
Early investors in SHIB and DOGE made astronomical returns, and Musk Fuks Robots could become the next viral memecoin.
Musk Fuks Robots launched with over $40,000 of liquidity, giving it a unique advantage over the majority of other new memecoins, and early investors could make huge gains.
How to Buy
To buy Musk Fuks Robots on Raydium.io or Jup.ag ahead of the CEX listings, users need to connect their Solflare, MetaMask or Phantom wallet, and swap Solana for Musk Fuks Robots by entering its contract address (CA) – 9yuANCwHs443YpCDnUr2GfSkDSTxUweQL1m2vMaYnTT5 – in the receiving field.
If you don’t have one of these wallets already, you can create a new wallet in a few minutes and transfer some Solana to it (which will then be used to buy the memecoin), from an exchange like Coinbase, Binance and many others.
Early investors could make returns similar to those who invested in Shiba Inu (SHIB) and Dogecoin (DOGE) before these memecoins went viral and exploded in price.
If this happens, a new wave of memecoin millionaires could be created in a matter of weeks – or potentially even sooner.
The Solana memecoin craze continues amid larger memecoins, like Shiba Inu (SHIB), Dogecoin (DOGE) and DogWifHat (WIF) trading sideways in recent weeks and losing momentum.
This is why many SHIB, DOGE and WIF investors are instead investing in new Solana memecoins, like MUSKROBO.
Such memecoins have no utility and no inherent value, but investors looking for high gains have been investing in them due to their potential to rapidly rise in price.
Musk Fuks Robots could turn early investors into multi-millionaires, like other memecoins, such as Shiba Inu (SHIB) and Dogecoin (DOGE), did.
Musk Fuks Robots (MUSKROBO), a Solana memecoin launched today, is set to explode over 18,000% in price in the coming days.
This is because MUSKROBO is set to soon be listed on numerous crypto exchanges, according to reports.
This will give the Solana memecoin exposure to millions of additional investors, who will pour funds into the coin and cause its price to rally, which will benefit investors who buy before these new exchange listings.
Currently, Musk Fuks Robots can only be purchased via Solana decentralized exchanges, like Jup.ag and Raydium.io, and early investors stand to make huge returns in the coming days.
Early investors in SHIB and DOGE made astronomical returns, and Musk Fuks Robots could become the next viral memecoin.
Musk Fuks Robots launched with over $40,000 of liquidity, giving it a unique advantage over the majority of other new memecoins, and early investors could make huge gains.
How to Buy
To buy Musk Fuks Robots on Raydium.io or Jup.ag ahead of the CEX listings, users need to connect their Solflare, MetaMask or Phantom wallet, and swap Solana for Musk Fuks Robots by entering its contract address (CA) – 9yuANCwHs443YpCDnUr2GfSkDSTxUweQL1m2vMaYnTT5 – in the receiving field.
If you don’t have one of these wallets already, you can create a new wallet in a few minutes and transfer some Solana to it (which will then be used to buy the memecoin), from an exchange like Coinbase, Binance and many others.
Early investors could make returns similar to those who invested in Shiba Inu (SHIB) and Dogecoin (DOGE) before these memecoins went viral and exploded in price.
If this happens, a new wave of memecoin millionaires could be created in a matter of weeks – or potentially even sooner.
The Solana memecoin craze continues amid larger memecoins, like Shiba Inu (SHIB), Dogecoin (DOGE) and DogWifHat (WIF) trading sideways in recent weeks and losing momentum.
This is why many SHIB, DOGE and WIF investors are instead investing in new Solana memecoins, like MUSKROBO.
Such memecoins have no utility and no inherent value, but investors looking for high gains have been investing in them due to their potential to rapidly rise in price.
Musk Fuks Robots could turn early investors into multi-millionaires, like other memecoins, such as Shiba Inu (SHIB) and Dogecoin (DOGE), did.
Musk Fuks Robots (MUSKROBO), a Solana memecoin launched today, is set to explode over 18,000% in price in the coming days.
This is because MUSKROBO is set to soon be listed on numerous crypto exchanges, according to reports.
This will give the Solana memecoin exposure to millions of additional investors, who will pour funds into the coin and cause its price to rally, which will benefit investors who buy before these new exchange listings.
Currently, Musk Fuks Robots can only be purchased via Solana decentralized exchanges, like Jup.ag and Raydium.io, and early investors stand to make huge returns in the coming days.
Early investors in SHIB and DOGE made astronomical returns, and Musk Fuks Robots could become the next viral memecoin.
Musk Fuks Robots launched with over $40,000 of liquidity, giving it a unique advantage over the majority of other new memecoins, and early investors could make huge gains.
How to Buy
To buy Musk Fuks Robots on Raydium.io or Jup.ag ahead of the CEX listings, users need to connect their Solflare, MetaMask or Phantom wallet, and swap Solana for Musk Fuks Robots by entering its contract address (CA) – 9yuANCwHs443YpCDnUr2GfSkDSTxUweQL1m2vMaYnTT5 – in the receiving field.
If you don’t have one of these wallets already, you can create a new wallet in a few minutes and transfer some Solana to it (which will then be used to buy the memecoin), from an exchange like Coinbase, Binance and many others.
Early investors could make returns similar to those who invested in Shiba Inu (SHIB) and Dogecoin (DOGE) before these memecoins went viral and exploded in price.
If this happens, a new wave of memecoin millionaires could be created in a matter of weeks – or potentially even sooner.
The Solana memecoin craze continues amid larger memecoins, like Shiba Inu (SHIB), Dogecoin (DOGE) and DogWifHat (WIF) trading sideways in recent weeks and losing momentum.
This is why many SHIB, DOGE and WIF investors are instead investing in new Solana memecoins, like MUSKROBO.
Such memecoins have no utility and no inherent value, but investors looking for high gains have been investing in them due to their potential to rapidly rise in price.
Trump Executive Order could turn early investors into multi-millionaires, like Shiba Inu (SHIB) and Dogecoin (DOGE) did.
Trump Executive Order (TRUMPEO), a new Solana memecoin that was launched today, is set to explode over 17,000% in price in the coming days.
This is because TRUMPEO is set to soon be listed on numerous crypto exchanges, according to reports.
This will give the Solana memecoin exposure to millions of additional investors, who will pour funds into the coin and drive its price up.
Currently, Trump Executive Order can only be purchased via Solana decentralized exchanges, like Jup.ag and Raydium.io, and early investors stand to make huge returns in the coming days.
Early investors in SHIB and DOGE made astronomical returns, and Trump Executive Order could become the next viral memecoin.
Trump Executive Order launched with over $25,000 of liquidity, giving it a unique advantage over the majority of other new memecoins, and early investors could make huge gains.
How to Buy
To buy Trump Executive Order on Raydium.io or Jup.ag ahead of the CEX listings, users need to connect their Solflare, MetaMask, or Phantom wallet and swap Solana for Trump Executive Order by entering its contract address – Guze7ScXTVo3JPwojxcVX5P7EEcC5ncAByrA47QJ6JzT – in the receiving field.
If you don’t have one of these wallets already, you can create a new wallet in a few minutes and transfer some Solana to it (which will then be used to buy the memecoin), from an exchange like Coinbase, Binance, and many others.
In fact, early investors could make returns similar to those who invested in Shiba Inu (SHIB) and Dogecoin (DOGE) before these memecoins went viral and exploded in price.
If this happens, a new wave of memecoin millionaires could be created in a matter of weeks – or potentially even sooner.
The Solana memecoin craze continues amid larger memecoins, like Shiba Inu (SHIB), Dogecoin (DOGE), and DogWifHat (WIF) trading sideways in recent weeks and losing momentum.
This is why many SHIB, DOGE, and WIF investors are instead investing in new Solana memecoins, like TRUMPEO.
Such memecoins have no utility and no inherent value, but investors looking for high gains have been investing in them due to their potential to rapidly rise in price.
Trump Executive Order could turn early investors into multi-millionaires, like Shiba Inu (SHIB) and Dogecoin (DOGE) did.
Trump Executive Order (TRUMPEO), a new Solana memecoin that was launched today, is set to explode over 17,000% in price in the coming days.
This is because TRUMPEO is set to soon be listed on numerous crypto exchanges, according to reports.
This will give the Solana memecoin exposure to millions of additional investors, who will pour funds into the coin and drive its price up.
Currently, Trump Executive Order can only be purchased via Solana decentralized exchanges, like Jup.ag and Raydium.io, and early investors stand to make huge returns in the coming days.
Early investors in SHIB and DOGE made astronomical returns, and Trump Executive Order could become the next viral memecoin.
Trump Executive Order launched with over $25,000 of liquidity, giving it a unique advantage over the majority of other new memecoins, and early investors could make huge gains.
How to Buy
To buy Trump Executive Order on Raydium.io or Jup.ag ahead of the CEX listings, users need to connect their Solflare, MetaMask, or Phantom wallet and swap Solana for Trump Executive Order by entering its contract address – Guze7ScXTVo3JPwojxcVX5P7EEcC5ncAByrA47QJ6JzT – in the receiving field.
If you don’t have one of these wallets already, you can create a new wallet in a few minutes and transfer some Solana to it (which will then be used to buy the memecoin), from an exchange like Coinbase, Binance, and many others.
In fact, early investors could make returns similar to those who invested in Shiba Inu (SHIB) and Dogecoin (DOGE) before these memecoins went viral and exploded in price.
If this happens, a new wave of memecoin millionaires could be created in a matter of weeks – or potentially even sooner.
The Solana memecoin craze continues amid larger memecoins, like Shiba Inu (SHIB), Dogecoin (DOGE), and DogWifHat (WIF) trading sideways in recent weeks and losing momentum.
This is why many SHIB, DOGE, and WIF investors are instead investing in new Solana memecoins, like TRUMPEO.
Such memecoins have no utility and no inherent value, but investors looking for high gains have been investing in them due to their potential to rapidly rise in price.
Nasdaq has filed a proposal on behalf of BlackRock, aiming to modify rules to permit in-kind creation and redemption for its spot Bitcoin exchange-traded fund (ETF). This filing marks a significant step in the evolution of cryptocurrency investment in the U.S. and highlights the growing adoption of Bitcoin ETFs.
Background on Spot Bitcoin ETFs in the U.S.
Spot Bitcoin ETFs represent direct ownership of Bitcoin, providing investors with a regulated way to gain exposure to the cryptocurrency without holding it directly. Unlike futures-based Bitcoin ETFs, which track contracts rather than the asset itself, spot ETFs directly hold Bitcoin, offering a closer reflection of the asset’s market value. The U.S. Securities and Exchange Commission (SEC) approved the first wave of spot Bitcoin ETFs in January 2024 after years of deliberation, ushering in a new era for institutional and retail investors.
BlackRock’s iShares Bitcoin Trust (IBIT), launched in January 2024 alongside ten other U.S. spot Bitcoin ETFs, has quickly emerged as the largest by inflows, boasting $39.57 billion in investments as of January 2024, according to Farside data. The move to allow in-kind transactions could further cement its market-leading position.
In-Kind Creation and Redemption Explained
Nasdaq’s filing with the SEC on Jan. 24 seeks to enable “in-kind transfers of the Trust’s Bitcoin,” according to the proposal. This mechanism would allow Authorized Participants—institutions responsible for the creation and redemption of ETF shares—to use Bitcoin or cash to create shares and to receive Bitcoin or cash upon redeeming shares.
James Seyffart, a Bloomberg ETF analyst, commented on the development in a Jan. 24 post on X (formerly Twitter), stating that BlackRock “should have been allowed to do this from the get-go.” Seyffart emphasized that the in-kind model streamlines the process, avoiding the bid/ask spreads and broker commissions typically associated with cash-based transactions.
Pseudonymous crypto analyst MartyParty echoed these sentiments, highlighting that the model enhances transparency and creates an on-chain record of fund flows. However, individual investors will not have access to the in-kind creation and redemption model, as Seyffart clarified: “Individuals won’t be able to do ‘in-kind’ creations and redemptions.”
Advantages of In-Kind Transactions
In-kind creation and redemption benefit ETFs by reducing transaction costs and improving efficiency. “What it means is that ETFs should trade even more efficiently than they already do theoretically because things can be streamlined,” said Seyffart. By eliminating intermediaries and reducing the number of steps in the process, this model enhances liquidity and minimizes disruptions in ETF pricing.
Chris J. Terry, chief architect at Bitseeker Consulting, emphasized the tax efficiency of the in-kind model. “By allowing the exchange of shares for underlying assets, ETFs can minimize capital gains distributions, which can be a benefit for investors holding shares in the fund,” he explained.
Competitive Landscape of Crypto ETFs
The Nasdaq filing coincided with a flurry of activity in the crypto ETF space. On the same day, European investment firm CoinShares filed for Litecoin (LTC) and XRP (XRP) ETFs. Grayscale also made headlines by submitting applications to convert its Solana (SOL) and Litecoin (LTC) Trusts into ETFs, alongside filings for a Bitcoin Adopters ETF and an Ethereum Premium Income ETF.
The race among asset managers to capture market share in the crypto ETF sector underscores the growing demand for regulated, institutional-grade investment products. BlackRock’s IBIT, with its massive inflows and focus on efficiency, has set a high bar for competitors.
Implications for the Future
As the largest spot Bitcoin ETF in the U.S., IBIT’s adoption of in-kind transactions could serve as a benchmark for the industry. Enhanced efficiency, transparency, and tax advantages position this model as a potential standard for future ETFs.
This development also highlights the broader acceptance of cryptocurrencies in traditional finance. With increasing competition and innovation, spot Bitcoin ETFs are poised to play a pivotal role in bridging the gap between traditional and digital asset markets.
For now, all eyes are on the SEC’s decision regarding Nasdaq’s proposed rule change, which could redefine the operational landscape for Bitcoin ETFs in the United States.
The U.S. Securities and Exchange Commission (SEC) has officially rescinded Staff Accounting Bulletin (SAB) 121, a controversial rule that required financial firms holding cryptocurrency for customers to classify those assets as liabilities on their balance sheets. The move, announced in a new bulletin on Jan. 23, has been celebrated by industry leaders and lawmakers as a step toward reducing regulatory hurdles for crypto adoption.
Background on SAB 121 and Crypto Enforcement
Introduced in March 2022, SAB 121 aimed to address the risks associated with holding digital assets by mandating that financial institutions classify customer-held crypto as liabilities. The rule also required firms to disclose specific risks associated with these holdings. While the SEC justified this measure as a necessary step to ensure transparency and protect consumers, it faced significant backlash from the crypto industry and lawmakers alike.
Critics argued that SAB 121 created unnecessary administrative burdens for banks and financial institutions, deterring them from offering crypto custody services. Representative Wiley Nickel pointed out that the rule could force American banks to forgo custody of crypto exchange-traded products (ETPs) at scale, potentially concentrating risk among non-bank entities. Similarly, Senator Cynthia Lummis labeled the rule “disastrous” for the banking industry and a hindrance to American innovation in digital assets.
The Decision to Rescind SAB 121
The SEC’s new bulletin overturning SAB 121 represents a significant policy shift under the leadership of SEC Commissioner Hester Peirce, a known advocate for crypto innovation. Peirce, who leads the agency’s crypto task force, expressed relief at the rule’s rescission, stating in a Jan. 23 X post, “Bye, bye SAB 121! It’s not been fun.”
This decision marks a notable departure from the more stringent regulatory approach championed by SEC Chair Gary Gensler, whose tenure has been characterized by heightened enforcement actions against the crypto industry. Gensler’s stance has drawn criticism for what many perceive as regulatory overreach, with some stakeholders arguing that such measures stifle growth in the nascent digital asset space.
Bipartisan Pushback Against SAB 121
The repeal of SAB 121 follows bipartisan efforts in Congress to overturn the rule. House Financial Services Committee Chair French Hill applauded the SEC’s decision, emphasizing that the rule was “misguided” and inconsistent with standard financial practices. “Holding reserves against the assets held in custody is NOT standard financial services practice,” Hill remarked.
Senator Lummis echoed this sentiment, celebrating the rule’s repeal as a victory for the banking and crypto industries. “I am THRILLED to see it repealed and get the SEC back on track to fulfilling its intended mission,” she stated.
Despite these efforts, a bill to repeal SAB 121 initially faced challenges. While it garnered bipartisan support in both the House and Senate, it was ultimately vetoed by former President Joe Biden in June 2023. The House’s subsequent attempt to override the veto fell 60 votes short.
Implications for the Crypto Industry
The cancellation of SAB 121 is expected to ease operational and regulatory challenges for financial firms looking to provide crypto custody services. By removing the requirement to classify customer-held crypto as liabilities, the decision could pave the way for broader institutional adoption of digital assets.
Chris J. Terry, chief architect at Bitseeker Consulting, highlighted the significance of this development: “This change will encourage more banks and financial institutions to enter the crypto space, enhancing competition and reducing concentration risks.”
The move also aligns with broader efforts to create a more favorable regulatory environment for digital assets in the United States. Industry leaders have long argued that clear and balanced regulations are critical to fostering innovation and maintaining the country’s competitive edge in the global crypto market.
Looking Ahead
As the SEC takes steps to recalibrate its approach to crypto regulation, the focus now shifts to the broader implications of this policy shift. The rescission of SAB 121 may signal a willingness to engage more constructively with the crypto industry, potentially paving the way for further regulatory reforms.
For now, stakeholders remain cautiously optimistic. While challenges persist, the repeal of SAB 121 marks a significant milestone in the ongoing effort to integrate digital assets into the traditional financial ecosystem. With regulators, lawmakers, and industry leaders working toward a common goal, the future of crypto in the United States looks increasingly promising.
Trump Executive Order could turn early investors into multi-millionaires, like Shiba Inu (SHIB) and Dogecoin (DOGE) did.
Trump Executive Order (TRUMPEO), a new Solana memecoin that was launched today, is set to explode over 17,000% in price in the coming days.
This is because TRUMPEO is set to soon be listed on numerous crypto exchanges, according to reports.
This will give the Solana memecoin exposure to millions of additional investors, who will pour funds into the coin and drive its price up.
Currently, Trump Executive Order can only be purchased via Solana decentralized exchanges, like Jup.ag and Raydium.io, and early investors stand to make huge returns in the coming days.
Early investors in SHIB and DOGE made astronomical returns, and Trump Executive Order could become the next viral memecoin.
Trump Executive Order launched with over $25,000 of liquidity, giving it a unique advantage over the majority of other new memecoins, and early investors could make huge gains.
How to Buy
To buy Trump Executive Order on Raydium.io or Jup.ag ahead of the CEX listings, users need to connect their Solflare, MetaMask, or Phantom wallet and swap Solana for Trump Executive Order by entering its contract address – Guze7ScXTVo3JPwojxcVX5P7EEcC5ncAByrA47QJ6JzT – in the receiving field.
If you don’t have one of these wallets already, you can create a new wallet in a few minutes and transfer some Solana to it (which will then be used to buy the memecoin), from an exchange like Coinbase, Binance, and many others.
In fact, early investors could make returns similar to those who invested in Shiba Inu (SHIB) and Dogecoin (DOGE) before these memecoins went viral and exploded in price.
If this happens, a new wave of memecoin millionaires could be created in a matter of weeks – or potentially even sooner.
The Solana memecoin craze continues amid larger memecoins, like Shiba Inu (SHIB), Dogecoin (DOGE), and DogWifHat (WIF) trading sideways in recent weeks and losing momentum.
This is why many SHIB, DOGE, and WIF investors are instead investing in new Solana memecoins, like TRUMPEO.
Such memecoins have no utility and no inherent value, but investors looking for high gains have been investing in them due to their potential to rapidly rise in price.
On December 3, 2024, South Korean cryptocurrency exchanges, including Upbit and Bithumb, experienced significant service disruptions due to an unexpected declaration of martial law by President Yoon Suk Yeol. The declaration, made during a televised address, was in response to escalating political tensions, which triggered widespread panic in financial markets, including cryptocurrency trading platforms.
Background on South Korean Crypto Markets and the Kimchi Premium
South Korea has long been a key player in the global cryptocurrency market. The country’s tech-savvy population and strong digital infrastructure have made it one of the largest crypto trading hubs. A notable phenomenon in the South Korean crypto landscape is the “Kimchi Premium,” where cryptocurrency prices in South Korea often trade higher than global averages. This premium arises from high local demand, limited supply, and regulatory barriers preventing arbitrage.
However, the country’s crypto sector has also faced challenges, including regulatory scrutiny and concerns over market manipulation. The events of December 3 underscore the vulnerability of crypto exchanges to unexpected political and market disruptions.
Impact of Martial Law Declaration on Crypto Markets
The martial law declaration led to a temporary 32% drop in Bitcoin’s price in South Korea, as panic selling and heightened trading activity overwhelmed local exchanges. Upbit, South Korea’s largest cryptocurrency exchange, reported a surge from its usual 100,000 concurrent users to over 1.1 million. Similarly, Bithumb and Coinone experienced a dramatic increase in user activity, with each platform exceeding 500,000 concurrent users.
This unprecedented demand caused server outages and trading disruptions. Upbit’s services were down for 99 minutes, while Bithumb and Coinone experienced 62 and 40 minutes of downtime, respectively.
Largest Crypto Compensation in South Korea’s History
In response to investor losses caused by the downtime, Upbit has agreed to compensate affected users with 3.14 billion South Korean won ($2.1 million) across 596 cases. Bithumb will provide 377.5 million won ($262,000) in compensation for 124 cases. These payouts represent the largest compensation effort in South Korea’s cryptocurrency history.
Negotiations between the exchanges and affected investors are ongoing, and the final compensation amounts may increase. Notably, other exchanges like Coinone, Korbit, and Gopax have stated that they are not liable for investor compensation due to their shorter service disruptions.
Regulatory and Preventative Measures
South Korean financial authorities have resumed on-site inspections of cryptocurrency exchanges as of December 20, aiming to prevent similar incidents in the future. Exchanges are now expected to adopt measures such as server expansions, cloud migration, and improved emergency response plans (Business Continuity Plans or BCPs) to ensure platform stability during periods of high demand.
A spokesperson from the Financial Supervisory Service (FSS) emphasized the importance of these measures: “We are checking whether the exchanges properly comply with their implementation plans, such as expanding servers and improving internal processes. We also plan to check whether they are responding well to complaints, including whether compensation standards are well set.”
Looking Ahead: Strengthening South Korea’s Crypto Ecosystem
The recent events highlight the need for robust infrastructure and regulatory frameworks to support South Korea’s burgeoning crypto industry. While the compensation efforts by Upbit and Bithumb demonstrate a commitment to investor protection, the outages reveal gaps in the existing system that must be addressed.
South Korea’s proactive approach, including regulatory oversight and mandatory infrastructure improvements, could serve as a model for other countries facing similar challenges in the crypto sector. Additionally, these measures may help stabilize the local market, mitigate risks associated with the Kimchi Premium, and build investor confidence.
As South Korea continues to solidify its position as a global cryptocurrency hub, balancing innovation with regulatory safeguards will be key to ensuring the long-term success and stability of its crypto ecosystem.