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South Korea’s two biggest crypto exchanges are bleeding. Upbit and Bithumb both reported sharp revenue declines in the first half of the year, and the numbers are pretty hard to look at.
Bithumb got hit especially hard. Operating profit collapsed to 14.9 billion won — roughly $11 million — down 83% from 90.1 billion won ($64 million) the year before. Operating revenue nearly halved, falling from 329.2 billion won ($233 million) to 168.8 billion won ($120 million). And that’s before you get to the net loss: 108.7 billion won, or about $77 million. That’s not a soft landing. That’s a wall.
Dunamu’s Numbers Tell a Similar Story
Dunamu, the parent company behind Upbit, didn’t fare much better. Operating revenue came in at 408.1 billion won ($289 million), a 49% drop from the prior year’s 801.9 billion won ($568 million). Operating profits fell nearly 80%, from 549.1 billion won ($389 million) down to 111.5 billion won ($79 million). The company pointed to reduced liquidity in the global digital asset market as the main driver, saying it dampened investor sentiment across the board.
That’s a consistent explanation. Both exchanges are basically saying the same thing: the global market dried up, traders pulled back, and fee revenue followed. It’s not complicated. When volumes fall, exchange income falls with them. The math is brutal and direct.
Crypto markets globally have been through a rough stretch, and South Korea’s retail-heavy trading culture makes local platforms especially sensitive to sentiment swings. When confidence drops, Korean retail traders tend to step back fast. That dynamic probably made Upbit and Bithumb more exposed than exchanges in markets with more institutional depth.
Polymarket Banned as Illegal Gambling
Meanwhile, South Korea’s Media and Communications Commission moved against Polymarket, the crypto-based prediction market platform. The commission classified Polymarket’s operations as illegal gambling, saying they violate both the Criminal Act and the National Sports Promotion Act. The core argument: Polymarket promotes speculative behavior that depends on events outside users’ control, which puts it squarely in gambling territory under Korean law.
Polymarket pushed back. The platform said it isn’t involved with user funds directly and had already removed Korean-language services from its interface. Neither move was enough. The commission went ahead and blocked access anyway, saying its priority is protecting domestic users regardless of what technical adjustments the platform made.
It’s a pretty firm line. The commission basically said: the underlying activity is what matters, not the language settings or the payment rails. If the contracts are speculative and the outcomes are unpredictable, that’s gambling. Full stop.
That’s a tough position for any prediction market operator trying to argue its way into South Korean compliance. Polymarket’s removal of Korean-language support was probably seen internally as a good-faith gesture. The commission clearly didn’t read it that way.
South Korea has been tightening its grip on digital asset platforms for a while now. The country has some of the most active retail crypto participation in the world, which makes regulators especially sensitive to anything that looks like it could expose ordinary users to financial harm. Prediction markets sit in an awkward gray zone globally — legal in some jurisdictions, heavily restricted in others — and South Korea came down firmly on the restrictive side.
The Polymarket ban and the Upbit/Bithumb revenue drops aren’t directly connected, but they paint a coherent picture of where South Korea’s crypto sector is right now. Exchanges are squeezed by weak global markets. Platforms operating in adjacent spaces are getting blocked outright. Neither situation looks like it resolves quickly.
Bithumb’s 83% operating profit drop is probably the single most striking figure in the first-half reports. Even accounting for a tough market environment, that kind of compression is severe. It’s the sort of number that forces conversations about cost structures, staffing, and long-term strategy. No details on what Bithumb plans to do next — the company didn’t specify, at least not publicly.
Dunamu’s 49% revenue drop is large too, though Upbit’s underlying position is stronger given it started from a higher base. Still, going from $568 million to $289 million in operating revenue in one year isn’t something any company absorbs without feeling it.
The commission’s block on Polymarket stays in place. Bithumb’s net loss sits at $77 million.
Frequently Asked Questions
How much did Bithumb’s operating profit fall in the first half of the year?
Bithumb’s operating profit dropped 83%, from 90.1 billion won ($64 million) to 14.9 billion won ($11 million), and the company posted a net loss of 108.7 billion won ($77 million).
Why did South Korea ban Polymarket?
South Korea’s Media and Communications Commission banned Polymarket, saying its prediction contracts violate the Criminal Act and National Sports Promotion Act by promoting speculative behavior tied to events outside users’ control — effectively classifying it as illegal gambling.
Why It Matters
The significant revenue declines at Upbit and Bithumb highlight the broader cooling of South Korea's crypto market, reflecting waning investor interest and potential regulatory challenges. As these exchanges struggle to maintain profitability, it raises concerns about the sustainability of the crypto ecosystem in the region and may prompt further scrutiny from regulators, impacting innovation and market dynamics. Additionally, this downturn could deter new entrants and investors, affecting the overall growth trajectory of cryptocurrencies in South Korea and beyond.
