Bithumb swung to a net loss of 108.691 billion won ($76.44 million) in the first half of 2026, reversing a 55.04 billion won ($38.71 million) profit a year earlier, as losses on crypto-asset disposals and a sharply larger litigation provision outweighed its still-profitable core trading business.
The South Korean exchange’s operating profit remained positive at 14.93 billion won ($10.50 million), according to its mid-August financial filing. Yet non-operating expenses reached 155.05 billion won ($109 million), pulling the company into the red despite lower spending across several operating categories.
Two items accounted for much of the reversal: a 68.55 billion won ($48.21 million) combined loss tied to crypto assets and a 36.87 billion won ($25.93 million) increase in the litigation provision. Together, they totaled roughly 105.42 billion won ($74.14 million), close to the reported half-year net loss before taxes, interest income and other non-operating entries.
Crypto disposals drove the largest loss
Bithumb recorded 11.99 billion won ($8.43 million) in proceeds from crypto-asset disposals during the six-month period, but booked disposal losses of 73.36 billion won ($51.59 million). The resulting net disposal loss of 61.37 billion won ($43.16 million) was roughly 12 times the comparable loss of about $4.18 million recorded in the first half of 2025.
The company also recognized a 7.19 billion won ($5.05 million) crypto-asset valuation loss. Together with the disposal result, these entries reduced earnings by about 68.55 billion won.
The filing comes after a February 6 bitcoin mis-transfer involving erroneous distributions to 695 users. Bithumb said more than 99% of the assets had been recovered, though the filing did not separately state the final accounting impact of the incident. The event prompted a public apology from the exchange’s chief executive, Lee.
Large disposal losses can arise when an exchange sells proprietary crypto holdings below their recorded carrying value. The scale of Bithumb’s first-half charge suggests that movements in the company’s own crypto inventory had a far greater effect on earnings than in the previous year, even as its core fee business continued to produce an operating profit.
Provision increase aligns with regulatory penalty
Bithumb’s litigation provision rose to 39.55 billion won ($27.81 million) at the end of June from 2.68 billion won ($1.88 million) at the end of 2025. The 36.87 billion won increase was nearly identical to a Financial Services Commission penalty decision of about 36.8 billion won issued in March.
The Financial Services Commission’s decision concerned anti-money-laundering controls, customer verification and transaction-restriction violations. Setting aside the larger provision reduced reported earnings immediately, even though the underlying proceedings and payment timing can follow separate legal and administrative processes.
The charge places compliance costs alongside crypto-asset accounting losses as the main pressure points in Bithumb’s half-year results. The exchange’s operating figures were weaker than a year ago, but they alone did not explain the final net loss.
Fee income fell nearly 49%
Operating revenue fell 48.7% from a year earlier to 168.77 billion won ($119 million), with transaction fees contributing 168.763 billion won. Fees therefore represented 99.995% of Bithumb’s reported operating revenue.
Other revenue, which had totaled about $10.60 million in the first half of 2025, fell to less than $6,000. That leaves Bithumb heavily dependent on trading activity and fee generation, with little revenue diversification to cushion lower volumes.
The decline continued into the second quarter. Bithumb reported a 21.8 billion won deficit for the three-month period, while quarterly revenue fell 35.8% year on year to 86.3 billion won. Operating profit for the quarter declined 44% to 12.1 billion won.
Costs fell, though not as quickly as revenue. Total cost of sales and selling, general and administrative expenses declined 35.6% year on year, compared with the 48.7% revenue decrease. Bithumb’s operating margin consequently narrowed to 8.8% from 27.4% a year earlier.
Sales-promotion spending dropped about 70% to 34.89 billion won ($24.54 million), from 117.07 billion won ($82.33 million). Payment fees were 46.26 billion won ($32.53 million), down about 2%, while salaries declined 6.5% to 30.91 billion won ($21.74 million). The figures indicate that promotional cuts helped contain expenses but could not fully offset the decline in fee revenue.
Customer balances accounted for most asset decline
Bithumb’s total assets fell to 2.49 trillion won ($1.752 billion) at the end of June, from 3.32 trillion won ($2.337 billion) at the beginning of the year. The 831.469 billion won ($584.3 million) reduction largely reflected changes in customer-linked won balances and cash allocation.
Member won deposits declined by 715.581 billion won ($502.9 million) to 1.32 trillion won ($927.3 million), accounting for about 86% of the overall asset decrease. Cash and cash equivalents fell by 773.428 billion won ($543.5 million), while short-term financial products increased by 80 billion won ($56.22 million).
Bithumb reported 194.099 billion won ($136.4 million) in proprietary crypto assets at the end of June. Customer-custodied crypto assets were valued at 12.05 trillion won ($8.468 billion), down from 17.90 trillion won ($12.581 billion) at the start of the year.
The filing said the quantities of bitcoin, ethereum and XRP held in custody increased over the period, even as the market value of customer assets fell 32.7%. Bitcoin’s reported period-end unit price was about 30.5% lower, indicating that price changes, rather than a broad reduction in coin balances, accounted for much of the decline in the custody valuation.
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