Why Did Upbit Avoid an Incident Despite Using the Same Ledger Transactions?

As Bithumb’s large-scale erroneous Bitcoin payout incident has put the “ledger-based trading” structure of centralized exchanges (CEXs) under scrutiny, Upbit, South Korea’s largest exchange, is drawing a contrast by emphasizing that it has already built and is operating a control system that structurally prevents such incidents.

According to the industry, the recent Bithumb incident amplified user anxiety as a clerical input error on the internal ledger led to a surge in apparent circulating supply. Upbit explained that while it uses the same ledger-based trading method, it has a system that fundamentally controls discrepancies between actual asset holdings and digital ledgers. Upbit stated, “The ledger method itself is not the problem; the key is how consistency is verified and controlled.”

The first safeguard highlighted by Upbit is its “Reserve Asset Proof System (Diff Monitoring).” This structure automatically cross-checks, 24 hours a day, 365 days a year, the quantity of digital assets actually held in blockchain wallets against the amounts recorded on internal digital ledgers. Given the frequent deposits and withdrawals and potential network confirmation delays inherent to digital assets, the system is designed to trigger immediate alerts when discrepancies beyond set thresholds are detected and to connect them to step-by-step control measures.

The second measure is a change to the event payout structure itself. Upbit processes event rewards not by “creating numbers,” but by “transferring pre-secured inventory.” The amounts scheduled for distribution are secured in advance and reflected in a dedicated event account, from which they are then distributed to customers—making it structurally impossible for unsecured quantities to be generated on the ledger.

In addition, Upbit separates its Digital Asset Management Team, Operations Team, and Monitoring Team so that execution, verification, and surveillance functions mutually check one another. With prior verification, execution, and continuous monitoring operating independently, the exchange says it prevents errors or judgment mistakes by a single individual from immediately escalating into large-scale incidents. This stands in contrast to concerns raised by the Bithumb case, where a small input error could expand into a major accident.

Industry officials note that “ledger-based trading at centralized exchanges is a common practice, similar to banks and securities firms,” adding that “the issue lies in the level of internal controls and real-time verification systems.” In fact, the Bithumb incident exposed gaps between exchanges, and Upbit’s constant reconciliation, pre-secured inventory, and multi-tier approval structure is being discussed as a potential benchmark model in future institutionalization efforts.

*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses incurred based on it. The content should be interpreted solely for informational purposes.*