Bithumb Half-Year Report: Massive Loss of $76 Million, Who Swallowed the Profits?

Who would have thought that an exchange could suffer such huge losses.

Written by: KarenZ, Foresight News

The most misleading aspect of financial reports is often not the numbers themselves, but the focus on just the net profit figure.

Bithumb reported a net loss of 108.691 billion Korean won (approximately $76.44 million) in the first half of this year. At first glance, this seems to indicate that the exchange has lost its profitability, but the reality is more complex.

Breaking down the profit and loss statement reveals that Bithumb's exchange business remains profitable. The real factors affecting the profit statement are losses from the disposal of crypto assets, valuation losses, and provisions for litigation.

In other words, to understand Bithumb's financial report, one must clarify at least four things: how much profit the exchange business made, how much the company's held crypto assets lost, how much was provisioned for regulatory and litigation risks, and how much cash flow was affected by client fund movements?

Core business remains profitable, but net profit is swallowed by two types of non-operating losses

In the first half of 2026, Bithumb achieved operating revenue of 168.77 billion Korean won (approximately $11.9 million), a year-on-year decrease of 48.7%; operating profit was 14.93 billion Korean won (approximately $10.5 million), down 83.4% year-on-year.

The real drag on the company was the non-operating items. During the reporting period, Bithumb's non-operating expenses reached 155.05 billion Korean won (approximately $10.9 million), resulting in a net loss of 108.69 billion Korean won (approximately $76.44 million). In comparison, the company's net profit for the same period in 2025 was 55.04 billion Korean won (approximately $38.71 million).

The first major loss comes from the crypto assets held by Bithumb and losses from their disposal.

In the first half of the year, the company recognized disposal gains of 11.99 billion Korean won (approximately $843,000) from crypto assets, while also recognizing disposal losses of 73.36 billion Korean won (approximately $5.16 million). After offsetting these two amounts, the net disposal loss was approximately 61.37 billion Korean won (approximately $4.32 million).

The financial report states that these disposals of crypto assets were mainly related to user activity rewards, blockchain network fees, and other business purposes. Notably, the disposal losses for the same period in 2025 were only about $418,000, while in the first half of 2026, they surged to about $5.16 million, more than 12 times the previous year.

It is worth mentioning that on February 6, Bithumb experienced an incident of mistakenly issuing Bitcoin. Bithumb later disclosed that this incident involved the erroneous issuance of Bitcoin to 695 users, with a recovery rate exceeding 99%. However, the company did not separately disclose the financial losses caused by this incident in the half-year report.

Additionally, the company confirmed a valuation loss of 7.19 billion Korean won (approximately $505,000) on crypto assets. When combining the net disposal loss with the valuation loss, the net loss related to crypto assets was approximately 68.55 billion Korean won (approximately $4.82 million).

The second impact comes from provisions for litigation.

As of the end of 2025, Bithumb's litigation provisions stood at 2.68 billion Korean won (approximately $188,000); by the end of June 2026, this figure had risen to 39.55 billion Korean won (approximately $2.78 million), an increase of 36.87 billion Korean won (approximately $2.59 million) over six months.

This increase is very close to the 36.8 billion Korean won fine imposed by the Financial Services Commission of Korea on Bithumb in March. The regulatory body found that Bithumb had violated anti-money laundering obligations, customer identity verification, and transaction restrictions as a virtual asset service provider.

When combining the net loss of approximately 68.55 billion Korean won (approximately $4.82 million) from crypto assets with the new litigation provision of approximately 36.87 billion Korean won (approximately $2.59 million), the total amounts to approximately 105.42 billion Korean won (approximately $7.41 million), which is very close to the company's net loss of 108.69 billion Korean won (approximately $76.44 million) for the half year.

Of course, this is just an approximate comparison to help understand the sources of profit and cannot be directly treated as a complete reconciliation of the profit and loss statement, as taxes, interest income, and other non-operating items also affect the final results.

Significant reduction in subsidies, yet revenue still nearly halved

Bithumb's operating revenue in the first half of the year was approximately $11.9 million, a year-on-year decrease of 48.7%.

Firstly, the cooling market has indeed directly impacted Bithumb's core business. Its revenue comes almost entirely from trading fees: in the first half of the year, fee income was 168.763 billion Korean won, accounting for 99.995% of operating revenue, rounded to 100% in the financial report. In 2025, other exchanges had revenue of $10.6 million, but by the first half of this year, it had dropped to less than $6,000.

The financial report explains this part of the revenue as fees for lending services, market data inquiries, etc., but does not disclose the specific reasons for the significant decline, making further inferences impossible.

During the same period, total operating costs and selling and administrative expenses decreased by 35.6%, but the rate of cost reduction did not keep pace with the decline in revenue.

As a result, the company's operating profit margin fell from 27.4% in the same period of 2025 to 8.8% in the first half of 2026.

The most obvious change is in marketing expenses. Bithumb's sales promotion expenses dropped from 117.07 billion Korean won (approximately $8.23 million) in the same period of 2025 to 34.89 billion Korean won (approximately $2.45 million), a reduction of about 70%. The company has clearly significantly reduced its efforts to attract users through rewards and subsidies.

However, several relatively fixed costs did not decrease significantly. Payment fees still amounted to 46.26 billion Korean won (approximately $3.25 million), a year-on-year decrease of only about 2%; salary expenses were 30.91 billion Korean won (approximately $2.17 million), a year-on-year decrease of about 6.5%.

These figures reveal an easily overlooked issue: exchanges can quickly cut activity rewards, but it is much harder to reduce payment, technology, compliance, and personnel costs at the same speed.

When market trading volumes decline, this structure, which heavily relies on fees, will directly reflect on the revenue side. Cutting marketing investments can protect some profits but cannot solve the problem of concentrated revenue sources.

Total assets shrink by $584 million, where did the money go?

As of the end of June 2026, Bithumb's total assets decreased from 33.2 trillion Korean won (approximately $23.37 billion) at the beginning of the year to 24.9 trillion Korean won (approximately $17.52 billion), a decrease of 831.469 billion Korean won (approximately $584.3 million) over six months.

At first glance, this asset decline is even more alarming than the net loss. However, the exchange's balance sheet cannot be understood in the same way as an ordinary company, as a significant portion of assets and liabilities come from customer deposits.

Compared to the end of 2025, Bithumb's member Korean won deposits on the books decreased from 20.4 trillion Korean won (approximately $14.3 billion) to 13.2 trillion Korean won (approximately $9.273 billion), a reduction of 715.581 billion Korean won (approximately $5.029 billion), accounting for about 86% of the total asset decline during the same period.

Cash and cash equivalents decreased by 773.428 billion Korean won (approximately $543.5 million), but the company simultaneously increased its short-term financial products by 80 billion Korean won (approximately $5.622 million).

Therefore, a significant portion of the asset shrinkage corresponds to the decline in customer Korean won deposits, as well as the company's allocation adjustments between cash and short-term financial products.

Another area that is easily confused is the distinction between Bithumb's own crypto assets and customer-held crypto assets.

As of the end of June, Bithumb's own crypto assets on the books were approximately 194.099 billion Korean won (approximately $136.4 million); customer-held crypto assets were approximately 12.05 trillion Korean won (approximately $846.8 million).

The market value of customer-held crypto assets decreased from 17.9 trillion Korean won (approximately $12.58 billion) at the beginning of the year to 12.05 trillion Korean won (approximately $846.8 million), a decline of about 32.7%. However, the decline in market value cannot be directly equated with customers withdrawing large amounts of assets. During the same period, the number of BTC, ETH, and XRP held by Bithumb increased; for BTC, the price per unit at the end of the financial report period decreased by about 30.5%. This indicates that the decline in the market value of held assets is at least partially influenced by the drop in coin prices, and one cannot simply judge customer fund flows based on total market value changes.

Summary

This financial report conveys a more complex signal: the core trading business still has profits, but revenue has significantly declined, and non-operating losses and regulatory costs have amplified the final losses.

What truly deserves attention next is not just whether net profit can turn positive, but also whether trading revenue can recover, whether the gains and losses related to virtual assets can narrow, and how much subsequent costs regulatory matters will leave for the company.