Due to Sharp Drop in Prices of Cryptocurrencies
Although the cryptocurrency market cooled down last year, Bithumb, South Korea’s largest cryptocurrency exchange, saw its sales increase. However, it posted a loss as the prices of its cryptocurrency assets, including Bitcoin, fell sharply.
Bithumb's sales came to 391.70 billion won (US$343.14 million) last year, up 17.5 percent from a year earlier, according to the cryptocurrency exchange on April 11. This was due to a rise in the total amount of transactions in 2018 compared to 2017. Most of Bithumb’s sales came from transaction fees.
However, Bithumb recorded a net loss of 205.40 billion won (US$179.94 million) last year, turning into losses. The cryptocurrency exchange made a net profit of 534.90 billion won (US$468.59 million) in 2017 thanks to cryptocurrency speculation but it posted a huge loss as the value of cryptocurrencies owned by Bithumb, including Bitcoin, plunged earlier last year. The price of Bitcoin surged to 20 million won (US$17,520) in January last year but dropped to below 8 million won (US$7,008) in February. Since then, the figure has been on the decline. An official from Bithumb said, “This is because 348.20 billion won (US$305.04 million) worth of losses on valuation of cryptocurrencies and losses on disposition were reflected.”
Bithumb also disclosed the result of due diligence conducted by an external accounting firm. BDO Sungto-Ehyun Ltd. said Bithumb's funds kept in financial institutions exceeds the total amount of Korean currency assets owned by its members as of April 8. In addition, Bithumb is keeping more cryptocurrencies than those of members in its own electronic wallet and all the cryptocurrencies of its members are stored in cold wallets which are safe from hacks.