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Only Upbit Posts Profit in 2018 Among S. Korea’s Top Four Crypto Exchanges
Plunge in Cryptocurrency Prices Affect Bottom Lines
Only Upbit Posts Profit in 2018 Among S. Korea’s Top Four Crypto Exchanges
  • By Yoon Young-sil
  • April 15, 2019, 10:09
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Among Korea’s top four crypto exchanges, Upbit alone posted a profit last year.

Three of Korea’s top four crypto exchanges posted a loss last year as the market prices of major cryptocurrencies fell sharply. Upbit was the only one which recorded a net profit of more than 100 billion won (US$87.95 million) despite a loss caused by the decline in cryptocurrency prices. This was largely due to the exchange’s commission policy that minimizes the amount of its cryptocurrency holdings.

The four biggest crypto exchanges all disclosed their audit reports for 2018, according to related industry sources on April 14. BTC Korea.Com Co., which operates Bithumb, announced on April 11 that it posted 391.70 billion won (US$344.50 million) in sales and 256.10 billion won (US$225.24 million) in operating profit last year. Its sales grew by 17.5 percent on-year, while its operating profit fell by 3.4 percent.

As the market prices of cryptocurrencies owned by the firm went down, it suffered a 226.80 billion won (US$199.47 million) of losses on valuation of cryptocurrencies. Moreover, 121.40 billion won (US$106.77 million) of losses on disposition of cryptocurrencies were incurred. As a result, BTC Korea.Com recorded a net loss of 205.40 billion won (US$180.65 million).

Coinone and Korbit also showed a poor performance in 2018. Coinone filed an audit report that covered the period from July 1 to Dec. 31 after changing its account basis. Its sales came to 4.57 billion won (US$4.02 million) in the second half of last year. Considering the fact that its annual sales from July 1, 2017 to June 30, 2018 reached 94.10 billion won (US$82.76 million), it showed a rapid drop in sales. With falling sales, its operating profit went into deficit as well. The exchange saw its net loss grow to 5.80 billion won (US$5.10 million) as it had an operating loss of 4.50 billion won (US$3.96 million) in addition to losses on valuation of cryptocurrencies and losses on disposition.

The situation was similar with Korbit, which posted 26.80 billion won (US$23.57 million) in sales last year. Its sales in 2017 stood at 75.40 billion won (US$66.31 million). Its operating profit also turned negative. Korbit had an operating profit of 61 billion won (US$53.65 million) in 2017 but it recorded an operating loss of 7.60 billion won (US$6.68 million) in 2018. Its net loss came to 45.80 billion won (US$40.28 million), including losses on valuation of cryptocurrencies and losses on disposition.

Unlike Bithumb, Coinone and Korbit which posted a net loss, Dunamu Inc., which operates Upbit, recorded a net profit of over 140 billion won (US$123.13 million). The company’s sales stood at 470.70 billion won (US$413.98 million) and operating profit at 287.50 billion won (US$252.86 million) last year. The figures grew by nearly two times compared to its sales and operating profit in 2017.

Dunamu also saw its losses on valuation of cryptocurrencies increase to 96.50 billion won (US$84.87 million). These non-operating expenses reduced Dunamu’s net profit to 143.30 billion won (US$126.03 million) last year. The company was able to stay in the black since it owned less cryptocurrencies than other crypto exchanges. Bithumb recorded over 340 billion won (US$299.03 million) of losses related to cryptocurrencies, while Dunamu had less than 100 billion won (US$87.95 million) of losses.