Upbit to Store User Data on AWS Servers Starting October 1

Upbit, South Korea’s largest cryptocurrency exchange, has revealed plans to store user data on Amazon Web Services (AWS) servers located in the United States starting October 1.

In an announcement, the exchange said the decision, which comes as part of a change in its privacy policy, is intended to bolster service reliability and address privacy and regulatory considerations.

Upbit said it seeks to enhance the continuity, scalability, and security of its services by leveraging AWS’s globally recognized infrastructure.

Major Exchanges Adopt AWS for Data Storage

The move by Upbut comes as major exchanges like Coinbase have also adopted AWS for data storage to safeguard user information from potential threats such as data breaches, system failures, and cyberattacks.

The robust security features offered by AWS are expected to mitigate risks and ensure the safety of user data during adverse events.

However, the switch to US-based servers introduces complexities related to data jurisdiction and privacy.

Under the Clarifying Lawful Overseas Use of Data (CLOUD) Act, enacted in 2018, US law enforcement agencies have the authority to compel companies like AWS to comply with data requests, even for information stored overseas.

This provision raises concerns that Upbit’s user data, including that of South Korean clients, could be accessible to US authorities, posing potential privacy issues for international users, especially those in regions with stringent data protection laws.

The change in Upbit’s data storage policy comes amid a surge in South Korea’s cryptocurrency market.

According to a recent Chainalysis report, the market has experienced substantial growth, influenced by the Korea Premium Index (KPI) — commonly known as the Kimchi Premium — which reflects the price disparity for cryptocurrencies like Bitcoin and Ether between South Korean exchanges and global markets.

South Korea’s crypto market is booming! 🚀 The rising Korea Premium Index, driven by local demand and institutional trading, is fueling price surges on exchanges. 💹

Big opportunities ahead! #Crypto #Bitcoin #SouthKorea #Blockchain pic.twitter.com/WNllDaiSAY

— Nancy Gupta (@nancy_29_05) September 18, 2024

The report attributes this premium to high local demand and favorable market conditions, further fueling the rapid expansion of the country’s crypto ecosystem.

South Koreans Turn to Crypto

A recent survey has revealed that most young South Koreans are losing faith in the national pension system, with many stating they see crypto and stocks as a better alternative.

The study found that more than three-quarters of people aged 20-39 “don’t trust” state-issued pensions.

Over half of respondents who said they were making their own pension plans claimed they were building their retirement funds with stocks and crypto.

Interestingly, even election candidates themselves have exposure to cryptocurrencies, with approximately 7% of them owning digital assets, according to a report by Yonhap that analyzed their asset disclosures.

Just recently, it was reported that South Korea is set to introduce stricter regulations for token listing on exchanges, including the blocking of tokens that have been hacked.

The country’s financial authorities are preparing to release guidelines for virtual asset trading support, expected to be published by the end of this month or early next month.