South Korea Crypto Exchanges See Operating Profits Plummet 78%

South Korean cryptocurrency exchanges have seen their operating profits plummet by 78% in the first half of this year, according to new data from the Korea Financial Intelligence Unit (KoFIU). The decline is attributed to a slump in trading activity, market valuations, and customer deposits. Average daily trading volume at domestic virtual asset exchanges fell by 44% compared to the previous six months, while market capitalization dropped by 33%. Won-denominated deposits also decreased by 35%, and exchange sales declined by 41%

Despite a slight increase of 0.4% in the number of accounts eligible to trade, the decline in trading activity is substantial. The KoFIU's survey covered 26 registered virtual asset service providers, including 17 exchange operators and nine custody and wallet providers, from January 1 through June 30.

The data comes amid signs that South Korean retail investors are shifting their attention from cryptocurrency to the country's stock market. In May, the value of cryptocurrency held by South Korean investors fell by 50.2% to 60.6 trillion won ($41.4 billion) over roughly a year, according to ChosunBiz. The outlet linked the decline to capital moving toward stocks.

A separate analysis by Cointelegraph found that combined average daily volume across Upbit, Bithumb, Coinone, Korbit, and Gopax had fallen about 89% year over year during comparable seven-day periods. In contrast, the KOSPI, South Korea's benchmark stock index, more than doubled over the 12 months to July 22.