Starting on October 1, Upbit, the largest cryptocurrency exchange in South Korea, will modify its privacy policy to store user data on AWS servers in the United States.
The exchange will store user data on Amazon Web Services (AWS) servers in the United States to improve service reliability and resolve privacy and regulatory concerns.
Transition to AWS
Utilizing the globally recognized cloud service provider, the transition to AWS is a strategic decision that enhances data security, scalability, and service continuity.
The infrastructure offered by AWS is intended to safeguard against data breaches, system malfunctions, and cyberattacks, as well as to guarantee the security of user information in the event of adverse events.
The transition is anticipated to enhance Upbit’s service reliability, particularly in performance and uptime. This trend is consistent with the adoption of AWS by other crypto exchanges, such as Coinbase, for data storage.
Regulatory and data-related matters
Upbit’s decision to store user data on AWS introduces privacy and jurisdictional considerations, such as the fact that user data will be subject to US laws and regulations.
US law enforcement agencies can compel companies such as AWS to comply with data requests, including data stored overseas, by enacting the Clarifying Lawful Overseas Use of Data (CLOUD) Act in 2018.
This change suggests that US authorities may request South Korean Upbit user data, which could concern international users, particularly those in countries with stringent privacy laws.
Growth of the crypto market in South Korea
According to a recent report by Chainalysis, the Korea Premium Index (KPI) has been the primary factor driving the substantial expansion of South Korea’s crypto market.
The KPI, known as the Kimchi Premium, quantifies the price disparity between South Korean exchanges and global markets for cryptocurrencies such as Bitcoin and Ether.
The report from Chainalysis indicated that the prices of crypto on local exchanges in South Korea have risen above the global averages due to institutional trading, local demand, and market conditions.
