Author: KarenZ, Foresight News
What's most deceptive in financial statements is often not the numbers themselves, but focusing solely on the net profit figure.
Bithumb recorded a net loss of 108.691 billion KRW (approximately $76.44 million) in the first half of this year. At first glance, this might seem to indicate the exchange has lost its profitability, but the reality is not that simple.
A breakdown of the income statement reveals that Bithumb's exchange business remained profitable. What truly altered the profit statement were mainly losses from crypto asset disposals, valuation losses, and litigation provisions.
In other words, to properly understand Bithumb's financial report, one must distinguish at least four things: how much the exchange business earned, how much the company's own crypto assets lost, how much was set aside for regulatory and litigation risks, and what was the impact of client fund flows on cash changes.
Core Business Still Profitable, But Net Profit Devoured by Two Types of Non-operating Losses
In the first half of 2026, Bithumb achieved operating revenue of 168.77 billion KRW (approximately $119 million), a year-on-year decrease of 48.7%; operating profit was 14.93 billion KRW (approximately $10.5 million), a year-on-year decrease of 83.4%.
What dragged the company into a loss were non-operating items. During the reporting period, Bithumb's non-operating expenses amounted to 155.05 billion KRW (approximately $109 million), resulting in a final net loss of 108.69 billion KRW (approximately $76.44 million). In comparison, the company's net profit for the same period in 2025 was 55.04 billion KRW (approximately $38.71 million).
The first major loss came from Bithumb's own crypto asset holdings and crypto asset disposal losses.
In the first half, the company recognized crypto asset disposal gains of 11.99 billion KRW (approximately $8.43 million), while recognizing disposal losses of 73.36 billion KRW (approximately $51.59 million). After offsetting these two items, the net disposal loss was approximately 61.37 billion KRW (approximately $43.16 million).
The financial report stated that these crypto asset disposals were mainly related to business purposes such as user activity rewards and blockchain network fees. It is noteworthy that the disposal loss for the same period in 2025 was only about $4.18 million, but in the first half of 2026, it increased to about $51.59 million, more than 12 times the previous year's figure.
Worth mentioning is that on February 6th, Bithumb experienced a Bitcoin mis-delivery incident. Bithumb later disclosed that the incident involved erroneous Bitcoin distributions to 695 users, with a subsequent recovery rate exceeding 99%. However, the company did not separately disclose the final financial loss caused by this event in the semi-annual report.
Additionally, the company recognized a crypto asset valuation loss of 7.19 billion KRW (approximately $5.05 million). Combining the net disposal loss with the valuation loss, the net loss related to crypto assets is approximately 68.55 billion KRW (approximately $48.21 million).
The second impact came from litigation provisions.
As of the end of 2025, Bithumb's litigation provision was 2.68 billion KRW (approximately $1.88 million); by the end of June 2026, this figure had increased to 39.55 billion KRW (approximately $27.81 million), an increase of 36.87 billion KRW (approximately $25.93 million) in half a year.
This increase closely matches the approximately 36.8 billion KRW fine decision imposed on Bithumb by the Korean Financial Services Commission in March. The regulatory authority determined that Bithumb violated obligations regarding anti-money laundering for virtual asset service providers, customer identity verification, and transaction restrictions.
Adding the approximately 68.55 billion KRW (approximately $48.21 million) net loss from crypto assets to the approximately 36.87 billion KRW (approximately $25.93 million) increase in litigation provisions gives a total of approximately 105.42 billion KRW (approximately $74.14 million), which is already very close to the company's half-year net loss of 108.69 billion KRW (approximately $76.44 million).
Of course, this is only an approximate comparison to help understand the profit sources and cannot be directly taken as a complete articulation of the income statement, as tax items, interest income, and other non-operating items also affect the final outcome.
Revenue Still Nearly Halved After Drastically Cutting Subsidies
Bithumb's first-half operating revenue was approximately $119 million, a year-on-year decrease of 48.7%.
First, market cooling has indeed directly impacted Bithumb's core business. Its revenue comes almost entirely from transaction fees: first-half fee income was 168.763 billion KRW, accounting for 99.995% of operating revenue, rounded to 100% in the financial report. In 2025, other exchange revenue was still $10.6 million, but by the first half of this year, it had fallen to less than $6,000.
The financial report explains this portion of income as loan service fees, market data query fees, etc., but does not disclose the specific reasons for its significant decline, making further inference impossible.
Operating costs and selling, general, and administrative expenses (SG&A) combined decreased by 35.6% year-on-year, but the cost reduction rate still lagged behind the revenue decline rate.
The result was that the company's operating profit margin dropped 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 decreased from 117.07 billion KRW (approximately $82.33 million) in the same period of 2025 to 34.89 billion KRW (approximately $24.54 million), a reduction of about 70%. The company has clearly significantly reduced its efforts to attract users through rewards and subsidies.
However, several relatively rigid costs did not see a simultaneous major decline. Payment processing fees still amounted to 46.26 billion KRW (approximately $32.53 million), down only about 2% year-on-year; salary expenses were 30.91 billion KRW (approximately $21.74 million), down about 6.5% year-on-year.
These numbers reveal a problem that is easily overlooked: exchanges can quickly cut activity rewards, but find it much harder to compress payment, technology, compliance, and personnel costs at the same pace.
When market trading volume declines, this highly fee-dependent structure is directly reflected in the revenue side. Cutting marketing investment 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 3.32 trillion KRW (approximately $2.337 billion) at the beginning of the year to 2.49 trillion KRW (approximately $1.752 billion), a reduction of 831.469 billion KRW (approximately $584.3 million) in half a year.
At first glance, this asset decline appears even more startling than the net loss. However, an exchange's balance sheet cannot be understood entirely like that of an ordinary company, as a significant portion of assets and liabilities come from client deposits.
Compared to the end of 2025, Bithumb's on-book KRW member deposits decreased from 2.04 trillion KRW (approximately $1.430 billion) to 1.32 trillion KRW (approximately $927.3 million), a reduction of 715.581 billion KRW (approximately $502.9 million), accounting for about 86% of the total asset decline in the same period.
Cash and cash equivalents decreased by 773.428 billion KRW (approximately $543.5 million), but the company simultaneously increased its short-term financial products by 80 billion KRW (approximately $56.22 million).
Therefore, a large portion of the total asset decline corresponds to the decrease in client KRW deposits and the company's allocation adjustments between cash and short-term financial products.
Another area prone to confusion is Bithumb's own crypto assets versus client-custodied crypto assets.
As of the end of June, Bithumb's on-book own crypto assets were approximately 194.099 billion KRW (approximately $136.4 million); client-custodied crypto assets were approximately 12.05 trillion KRW (approximately $846.8 million).
The market value of client-custodied crypto assets decreased from 17.90 trillion KRW (approximately $1.2581 billion) at the beginning of the year to 12.05 trillion KRW (approximately $846.8 million), a decline of about 32.7%. However, a market value decline cannot be directly equated to clients withdrawing a large amount of assets. During the same period, the quantity of BTC, ETH, and XRP held in custody by Bithumb increased; for example, the price per BTC decreased about 30.5% at the end of the reporting period. This indicates that the shrinkage in custodied asset market value was at least partially affected by price declines; client fund flows cannot be judged solely based on total market value changes.
Summary
This financial report conveys a more complex signal: the core trading business is still profitable, but revenue has declined significantly, and non-operating losses and regulatory costs have amplified the final loss.
What is truly worth watching next is not just whether net profit can turn positive, but also whether trading revenue can recover, whether virtual asset-related gains and losses can narrow, and how much subsequent cost regulatory matters will leave for the company.
