Bithumb, South Korea’s second-largest cryptocurrency exchange, is still profitable after suffering one of the biggest hacks in cryptocurrency history. A public report released by the company revealed that it has made a $35 million profit in the third quarter of the year.
This is after the company posted an extraordinary annual gain of nearly $400 million in 2017 on the back of the national frenzy over digital money. At the time, global trading volumes held steady above $40 billion when the virtual asset class gripped the attention in Korea and worldwide alike.
The exchange recorded an estimated writedown of $40 million for the funds used to compensate customers, i.e. it should have gained $70 million without losses incurred due to the security breach occurred in June.
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Bithumb makes money from trading volume when cryptocurrencies change hands between investors. The exchange is a subsidiary of the publicly traded company BTC Korea.Com, and it is thus obliged to file its audited accounts to the Financial Services Commission (FSC).
By comparison, Upbit, No. 1 operator in South Korea with a market share of over 50 percent, earned $70 million in the same three-month period, putting the Kakao-backed exchange’s profits roughly on par with those of the world’s top crypto venues.
Earlier in May, Upbit was raided by government’s investigators and local police for alleged fraud. However, the exchange managed to pass independent audits, showing full solvency as Upbit’s reserves ratio stands at 103 percent and cash ratio stands at 127 percent.
The solid earnings are definitely good news for the industry in South Korea, which has been cracking down on the cryptocurrencies to combat excessive speculation and illegal activities, part of a push by governments around the world to rein the nascent sector in. Over the past few months, Korean authorities have raided several crypto venues, banned ICOs, blocked foreigners and financial institutions from domestic exchanges.