South Korea's Crypto Exchanges Suffer 78% Profit Decline Amid Slumping Trading Volumes

South Korea's regulated crypto industry saw a significant decline in profits during the first half of 2026, with operating profits plummeting by 78%. The sharp earnings contraction was attributed to weaker market throughput and contracting customer funds. According to data from the Korea Financial Intelligence Unit (KoFIU), average daily trading volume at domestic virtual asset exchanges fell by 44%, while market capitalization declined by 33%.

The decline in profits was further exacerbated by a 35% drop in won-denominated deposits and a 41% decrease in exchange sales. Notably, the number of accounts eligible to trade increased by 0.4%, but this growth did not translate into stronger activity or balance growth.

The findings align with broader indications that retail attention may be shifting from crypto towards South Korea's stock market. The value of crypto held by South Korean investors fell 50.2% in the past year, and combined average daily volume across major exchanges had fallen by about 89% year over year in July.

The changes suggest a shift in investor behavior, with capital being redirected from crypto towards equities. This trend may continue to impact the profitability of local operators in the second half of 2026, making it essential for investors to monitor exchange deposits and trading volumes.