At 11:27 PM on September 2, the Bithumb exchange suddenly went down, leaving traders unable to execute orders, with order books frozen and trading completely halted for nearly two hours. According to Bithumb, the cause was an internal system error, not an external attack. While this is reassuring, it also highlights the platform's weak infrastructure, which should be built to withstand high pressure.

The incident occurred at a sensitive time when the crypto market can be volatile, catching investors off guard. For those trying to take profits, cut losses, or buy the dip, a 100-minute outage is a long time, enough to cause significant financial damage. Bithumb's promise to fully compensate affected customers is a positive step toward regaining trust, but the process is expected to take "about a month," which could cause further inconvenience and anxiety for clients.

Broader Context: The Systemic Issues of South Korean Exchanges

The Bithumb incident is not an isolated case. It is part of a larger, persistent problem within South Korea's crypto industry. According to data from lawmaker Lee Heon-seung's office, there have been 89 outages at the five largest exchanges from 2018 to 2024. Notably, Bithumb accounts for 41 of these incidents, indicating this is a recurring issue for the platform. Upbit, Bithumb's main competitor, also experienced 28 outages during the same period.

The event is particularly noteworthy as it follows the martial law crisis in December 2024. When former President Yoon Suk-yeol attempted to declare martial law, the crypto market became chaotic. The sudden and massive surge in web traffic proved too much for major exchanges, leading to serious system failures. This instability has increased investor dissatisfaction.

What Solutions Are Needed?

The Bithumb incident has highlighted vulnerabilities in South Korea's crypto market's legal and technical systems. Industry officials have repeatedly emphasized the need to strengthen legal frameworks. The lack of strict regulations on platform stability has allowed exchanges to operate with high risks, and when problems occur, the damage falls on investors.

As for the exchanges, they need to proactively invest in their technical infrastructure, upgrading systems to ensure stability and the ability to handle high traffic volumes, especially during periods of market volatility. Bithumb plans to list on the NASDAQ by 2026 and has formed a subsidiary to separate its operations. This move indicates that Bithumb is striving for a more transparent and professional business model. However, to truly regain investor trust, it must prove the stability of its core platform.

The Bithumb incident serves as a wake-up call for the entire South Korean crypto market. It is not just one exchange's problem but a warning about the safety and transparency of the entire industry. The question now is not whether exchanges should strengthen their systems, but when they will genuinely act to protect users and avoid repeating past mistakes.