Crypto Exchanges Set Up User Protection Reserves: Bithumb and Upbit Lead

02 April, 2025, 06:30 AM

Virtual asset exchanges in South Korea are bolstering user protection by establishing dedicated reserves. This move comes in response to increasing regulatory pressure and a commitment to safeguarding user assets against potential threats like hacking and system failures. Bithumb is leading the charge with a substantial 100 billion KRW investment, while Upbit is allocating 48.3 billion KRW. These reserves are designed to compensate users in the event of unforeseen circumstances. The recently enacted Virtual Asset User Protection Act mandates that exchanges maintain at least 80% of customer-entrusted virtual assets in cold wallets, effectively isolating them from online vulnerabilities. Beyond Bithumb and Upbit, other major exchanges such as Coinone, Korbit, and Gopax have also taken proactive measures by either establishing reserves or securing comprehensive insurance coverage. These initiatives underscore the industry's growing focus on security and investor confidence in the rapidly evolving cryptocurrency market. ```