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| The corporate logo of Upbit is displayed at its headquarters in Seoul in this file photo. Yonhap |
By Lee Min-hyung
Upbit, the nation's leading crypto exchange operator, will introduce an independent login system so as to cut its reliance on Kakao, which suffered a data center fire that blocked Upbit users from trading their cryptocurrencies during the weekend.
Up until now, users have had to log in with their KakaoTalk accounts when accessing Upbit. KakaoTalk is the dominant messaging app in Korea, so a number of companies have adopted a social login system via Kakao. Upbit was one of them.
However, the crypto exchange faced unexpected problems after KakaoTalk became unavailable during the weekend due to the server outage. Upbit users have complained that they could not access the platform and trade their cryptocurrencies in real-time.
Upbit said it would partially compensate any losses suffered by investors by offering commission-free benefits. The company also decided to stop using the current Kakao login system from Nov. 22, and replace it with its own one.
Starting from Oct. 31, Upbit's independent login system will be available to users, and the current social login service will stop being used, according to Upbit.
"Users can seek compensation for their losses from the latest login error," a spokesperson at Upbit said. "They can send us details of when they tried to access Upbit, but failed due to the Kakao server outage. We will then review their complaints and take relevant steps for compensation."
Lee Sirgoo, CEO of Dunamu which operates Upbit, is also expected to share further details on compensation and countermeasures to prevent the recurrence of similar incidents by appearing in a National Assembly audit slated for Oct. 24.
The Kakao service disruption dealt a severe blow to major exchanges' crypto trading volume during the weekend. According to data from cryptocurrency aggregator, CoinGecko, Upbit's daily trading volume reached around 2.5 trillion won on Oct. 14, a day before Kakao's meltdown. But it sharply fell to 1.8 trillion won on Saturday when the fire broke out at Kakao's data center. It took more than 10 hours for Kakao to normalize its messenger service.
The shock lingered on with the trading volume declining on Sunday to around 910 billion won.
Other exchanges were also hit hard by the falling trading volume during the same period. Bithumb, the second-largest crypto exchange here, reported more than 550 billion won in its daily trading volume on Oct. 14, but the figure dropped to less than 430 billion won the following day. The pace of decline became sharper with daily transactions amounting to just 256 billion won on Sunday.
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