Upbit Exchange to launch committee: Plans to refund Terra Investors

Lavina Daryanani
Source: Cryptoknowmics

May was quite a brutal month, as the entire Terra ecosystem collapsed. Back then, Korea’s top virtual asset exchange Upbit had announced that it will return 9.5 billion won that it earned via commissions during the ‘Luna Crash’ in May back to investors. Another prominent exchange Korbit had said that it planned to use transaction fees from any LUNA-related activity that occurred after May 10, for its customer protection. At that time, the firm explained,

“The money will be used to support customers that faced losses due to crypto deposit mistakes and phishing scams.”

The afore-highlighted commitments have, however, not been honored by any exchange, for no formal step has been taken yet. A recent investigation by the Korean media house ‘SBS Biz’ affirmed the same. SBS revealed that Korbit’s final commission income during this period was estimated at 27 million won. However, until now, the exchange is still “considering specific ways to use it.”

The situation is somewhat similar to Upbit. Per SBS, even Upbit had not formed an expert committee to determine where the fees will be used. However, during the time of crisis, the exchange said,

“We feel moral responsibility beyond legal responsibility for investment losses. Upbit will not decide how and where the Luna transaction fee will be used but will form a separate committee composed of internal and external experts to discuss it together.”

Does the delay mean investors will get a smaller piece of the pie?

Post the Terra debacle, crypto prices have significantly slashed down. Resultantly, the delay in the whole refund process implicitly means that the exchange has to return back a lesser amount to investors. Elaborating on the same, SBS noted,

“Meanwhile, the amount of fees to be refunded is getting smaller. This is because the Bitcoin price has plummeted from the $30,000 level at the end of May to the current level of $22,000 while the fee received is kept in the Bitcoin wallet.”

Post SBS’s investigation, Upbit revealed, that “the commission is to be launched soon.”

Notably, the commission will be responsible for deciding on what basis the fee amount will be calculated. The amount of the refund fee stood around 9.5 billion won on 30 May. However, per SBS’s estimates, as of 10 August, the same stood at a deflated 7.3 billion won.

Also Read – Terra Luna: South Korea to Launch New Crypto Oversight Committee