Bitcoin Exchanges Suffer Steep Losses

Cryptocurrency exchanges are reeling from the global crash.

Dunamu, which operates Korea's biggest cryptocurrency exchange Upbit, said Monday that it suffered a net loss of W34 billion in the second quarter (US$1=W1,348).

Sales plummeted 75 percent to W358.2 billion and operating profit fell 79 percent to W278.2 billion. But it was the devaluation of their cryptocurrency holdings that dealt the heaviest blow, resulting in a W372.5 billion loss.

"The cryptocurrency market shrank due to a drop in global liquidity, resulting in falling revenues and operating profit, and the value of Bitcoin and other digital assets in our inventory, resulting in huge losses," a staffer said.

At No. 2 Bithumb, revenues in the first half of this year plunged 66.4 percent on-year to W205 billion and operating profit 77 percent to W123 billion. The exchange managed to eke out a W7.5 billion net profit, but customer deposits shrank from W2.23 trillion at the end of 2021 to W1.60 trillion.

Domestic cryptocurrency exchanges are struggling to find new sources of revenue such as non-fungible tokens (NFTs), but prospects are not bright.