TL;DR
- Upbit will migrate user data storage to Amazon Web Services (AWS) servers in the United States starting October 1, 2024.
- The measure seeks to improve the reliability of the service and comply with local and privacy regulations.
- There are concerns about data privacy due to US laws such as the CLOUD Act.
Upbit, South Korea’s largest cryptocurrency exchange, has announced an update to its privacy policy that will come into effect on October 1, 2024.
This change means that the company will begin storing its users data on Amazon Web Services (AWS) servers in the United States, which aims to improve the continuity and scalability of its services, as well as strengthen information security.
Using AWS infrastructure will enable Upbit to ensure data protection against potential cyberattacks, system failures or disasters.
This decision is not unprecedented, as other major exchanges such as Coinbase have also opted for the AWS cloud platform to host their users information.
With this migration, Upbit hopes to deliver better performance in terms of uptime and responsiveness, ensuring a more reliable service for its customers.
However, this change is not without concerns, especially when it comes to user privacy.
By hosting information on servers located in the United States, Upbit user data will be subject to U.S. laws, including the CLOUD Act.
The legislation, passed in 2018, gives US security agencies the power to request information stored by companies like AWS, even if that information belongs to citizens of other countries.
This has raised questions about whether US authorities could have access to South Korean users data, calling into question compliance with stricter privacy regulations in other countries.
Upbit and the crypto market in South Korea are growing
The shift to AWS coincides with a boom in the cryptocurrency market in South Korea.
A recent report from Chainalysis has noted significant growth driven by the Korea Premium Index (KPI), also known as the Kimchi Premium, which measures the price difference of cryptocurrencies like Bitcoin and Ether between South Korean exchanges and international markets.
This phenomenon has been driven primarily by increased institutional trading and strong local demand, which has pushed cryptocurrency prices in South Korea above global averages.
For Upbit, this growth represents an opportunity, but also a challenge in terms of offering more reliable and secure services, something they seek to solve with the migration to AWS.
Despite the operational advantages that AWS can offer, the issue of privacy will be a sore point for users, especially those in countries with stricter regulations.
The possibility of US authorities accessing your data raises a dilemma about how to best protect the information of international customers in an increasingly interconnected global environment.
Upbit’s move reflects a broader trend in the crypto ecosystem: the need to balance service expansion and improvement with compliance with local and international regulations.
