Upbit, South Korea’s leading cryptocurrency exchange, has announced a significant update to its privacy policy, stating that it will begin storing user data on servers located in the United States starting October 1. This transition involves utilizing Amazon Web Services (AWS) to enhance the reliability of its services while also addressing privacy and regulatory concerns.
Inquiries sent to both Upbit and AWS for additional comments went unanswered by the time of publication.
### Transition to AWS Explained
The decision to migrate to AWS is a strategic move aimed at bolstering service continuity, scalability, and data security by leveraging the capabilities of a globally recognized cloud service provider. AWS’s infrastructure is specifically designed to safeguard against data breaches, system failures, and cyberattacks, ensuring user information remains secure even during adverse circumstances.
This shift is anticipated to enhance Upbit’s service reliability, particularly in terms of performance and uptime, following a trend set by other cryptocurrency exchanges like Coinbase, which has also adopted AWS for data storage.
### Data and Regulatory Considerations
Upbit’s choice to host user data on AWS introduces important privacy and jurisdictional implications. Notably, user data will fall under U.S. laws and regulations. The Clarifying Lawful Overseas Use of Data (CLOUD) Act, enacted in 2018, permits U.S. law enforcement agencies to compel companies like AWS to fulfill data requests, even for data stored outside the United States.
This adjustment raises concerns regarding data privacy for international users, particularly those in nations with stringent privacy laws, as U.S. authorities could potentially request access to user data from South Korean users of Upbit.
### Growth of South Korea’s Crypto Market
A recent report from Chainalysis has underscored the remarkable growth of South Korea’s cryptocurrency market, largely fueled by the increase in the Korea Premium Index (KPI). Commonly known as the Kimchi Premium, the KPI tracks the price discrepancies of cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) between South Korean exchanges and the global market.
The report from Chainalysis indicates that factors such as institutional trading, local demand, and specific market conditions in South Korea have driven local crypto prices to exceed global averages.
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