Bithumb's operating profit collapsed 83% to $11M; Upbit's parent saw revenue halve. Regulators blocked Polymarket as illegal gambling, adding to the sector's pressure.
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South Korea's two largest crypto exchanges, Upbit and Bithumb, reported sharp declines in first-half earnings. Bithumb's operating profit collapsed 83% to 14.9 billion won ($11 million) from 90.1 billion won a year earlier. The exchange posted a net loss of 108.7 billion won ($77 million). Operating revenue nearly halved to 168.8 billion won ($120 million) from 329.2 billion won.
Dunamu, the parent company of Upbit, fared little better. Operating revenue fell 49% to 408.1 billion won ($289 million) from 801.9 billion won. Operating profit dropped 80% to 111.5 billion won ($79 million). Dunamu said the decline reflected reduced liquidity in global digital asset markets, dampening investor sentiment across the board.
Both exchanges attributed the downturn to the same factor: traders pulled back, fee income followed. South Korea's retail-heavy trading culture makes local platforms especially sensitive to sentiment swings. When confidence drops, retail traders tend to step back fast, amplifying the impact versus markets with more institutional depth.
Separately, the Korea Communications Commission blocked Polymarket, classifying the crypto-based prediction market platform as illegal gambling. The commission said Polymarket's operations violate the Criminal Act and the National Sports Promotion Act. The core argument: the contracts promote speculative behavior tied to events outside users' control, which puts the activity squarely in gambling territory under Korean law.
Polymarket had already removed Korean-language services from its interface. The commission said the underlying activity matters, not the language settings or payment rails. The platform said it does not directly handle user funds, but the commission moved ahead with the block anyway, citing its priority to protect domestic users.
The Polymarket ban and the exchange revenue drops are not directly connected, but they paint a coherent picture of where South Korea's crypto sector sits. Exchanges are squeezed by weak global volumes. Adjacent platforms face outright access restrictions. Neither situation looks likely to resolve quickly.
Bithumb's 83% operating profit compression is the most striking figure in the first-half reports. Even in a tough market environment, that kind of decline forces conversations about cost structures, staffing, and long-term strategy. Bithumb did not specify any plans publicly. Dunamu's 49% revenue drop is large too, though Upbit's underlying position is stronger given the higher base. Going from $568 million to $289 million in operating revenue in one year is a severe hit for any company.
The commission's block on Polymarket stays in place. Bithumb's net loss sits at $77 million.
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