Upbit, South Korea’s largest cryptocurrency exchange, has recently announced plans to store user data on Amazon Web Services (AWS) servers in the United States beginning October 1. This move marks a strategic shift in the exchange's privacy policy, aimed at enhancing service reliability and addressing privacy and regulatory concerns. By leveraging AWS's globally renowned infrastructure, Upbit aims to improve the continuity, scalability, and security of its services.
Major Exchanges Adopt AWS for Data Storage
Following in the footsteps of major exchanges like Coinbase, Upbit's decision to utilize AWS for data storage underscores the industry trend towards enhancing data security and safeguarding user information from potential threats such as data breaches and cyberattacks. By leveraging AWS's robust security features, exchanges can minimize risks and ensure the safety of user data in adverse circumstances.
However, the shift to US-based servers brings about 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 raises concerns about the accessibility of Upbit's user data to US authorities and the potential privacy implications for international users.
The decision to store user data on AWS servers coincides with a surge in South Korea's cryptocurrency market, as highlighted in a recent Chainalysis report. The market has witnessed significant growth driven by factors such as the Korea Premium Index (KPI), commonly known as the Kimchi Premium, which reflects price disparities for cryptocurrencies between South Korean exchanges and global markets.
The report attributes the Kimchi Premium to high local demand and favorable market conditions, fueling the rapid expansion of South Korea's crypto ecosystem. This growth aligns with the broader trend of South Koreans turning to cryptocurrency and stocks as alternatives to traditional financial instruments.
crypto">South Koreans Turn to crypto
A recent survey revealed a growing disillusionment among young South Koreans with the national pension system, with many favoring investments in crypto and stocks. The survey indicated that over three-quarters of individuals aged 20-39 do not trust state-issued pensions, leading them to explore alternative investment avenues.
more than half of respondents making their own pension arrangements stated that they were allocating funds to stocks and cryptocurrencies. Even election candidates in South Korea have shown exposure to cryptocurrencies, with around 7% of them reportedly owning digital assets, according to asset disclosure reports.
As South Korea prepares to implement stricter regulations for token listings on exchanges, including measures to block tokens that have been compromised, the country's financial authorities are gearing up to release guidelines for supporting virtual asset trading. These guidelines are expected to be published by the end of the current month or early next month, reflecting the evolving regulatory landscape in South Korea's crypto sector.
