Author: KarenZ, Foresight News

The most easily misjudged aspect of financial reports is often not the numbers themselves, but the singular focus on net profit.

Bithumb reported a net loss of 108.691 billion Korean won (approximately 76.44 million USD) in the first half of this year. At first glance, this seems to suggest 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 operations remain profitable. What truly altered the profit and loss statement were primarily losses from the disposal of crypto assets, valuation losses, and litigation provisions.

In other words, to truly understand Bithumb's financial report, one must clarify at least four things: how much the exchange operations earned, how much the company's held crypto assets lost, how much was provisioned for regulatory and litigation risks, and how much cash flow variations were brought by customer fund movements?

The main business is still 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 USD), a year-on-year decline of 48.7%; operating profit was 14.93 billion Korean won (approximately 1.05 million USD), a year-on-year decline of 83.4%.

What really dragged the company into a loss were non-operating items. During the reporting period, Bithumb's non-operating expenses reached 155.05 billion Korean won (approximately 10.9 million USD), leading to a final net loss of 108.69 billion Korean won (approximately 76.44 million USD). In comparison, the company's net profit for the same period in 2025 was 55.04 billion Korean won (approximately 3.871 million USD).

The first major loss came from the crypto assets held by Bithumb itself and losses from crypto asset disposals.

In the first half of the year, the company reported crypto asset disposal gains of 11.99 billion Korean won (approximately 843,000 USD), while also acknowledging disposal losses of 73.36 billion Korean won (approximately 5.159 million USD); after offsetting these, the net disposal loss was around 61.37 billion Korean won (approximately 4.316 million USD).

The financial report states that these crypto asset disposals were primarily related to user incentive rewards, blockchain network transaction fees, and other business purposes. Notably, the disposal losses for the same period in 2025 were only about 4.18 million USD, while in the first half of 2026, they increased to about 5.159 million USD, over 12 times that of the previous year.

It's worth mentioning that on February 6, Bithumb experienced an incident of erroneous Bitcoin distribution. Bithumb later disclosed that the incident involved the mistaken issuance of Bitcoin to 695 users, with a recovery rate of over 99%. However, the company did not separately disclose in the semi-annual report the financial losses ultimately incurred from this incident.

Additionally, the company confirmed a crypto asset valuation loss of 7.19 billion Korean won (approximately 505,000 USD). Combining the net disposal losses with the valuation losses, the total net loss related to crypto assets was approximately 68.55 billion Korean won (approximately 4.821 million USD).

The second hit came from litigation provisions.

As of the end of 2025, Bithumb's litigation provisions stood at 2.68 billion Korean won (approximately 1.88 million USD); by the end of June 2026, this figure had increased to 39.55 billion Korean won (approximately 27.81 million USD), an increase of 36.87 billion Korean won (approximately 25.93 million USD) over the half year.

This increase closely aligns with the South Korean Financial Services Commission's penalty decision against Bithumb for approximately 36.8 billion Korean won in March. The regulators found that Bithumb had violations regarding its anti-money laundering obligations, client identity verification, and transaction restrictions.

Combining the approximately 68.55 billion Korean won (approximately 4.821 million USD) net loss from crypto assets with the approximately 36.87 billion Korean won (approximately 25.93 million USD) newly added litigation provisions, the total amounts to about 1054.2 billion Korean won (approximately 7.414 million USD), which is very close to the company's net loss of 108.69 billion Korean won (approximately 76.44 million USD) for the half year.

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

After significantly reducing subsidies, revenue still nearly halved

Bithumb's operating revenue for the first half of the year was approximately 11.9 million USD, a year-on-year decline of 48.7%.

First, the market cooling has indeed directly impacted Bithumb's core operations. Its revenue is almost entirely derived from transaction fees: the fee income for the first half of the year was 168.763 billion Korean won, accounting for 99.995% of the operating revenue, rounded to 100% in the financial report. In 2025, other exchanges had revenue of about 10.6 million USD, while this year’s first half had dropped to less than 6,000 USD.

The financial report explains this portion of revenue as service fees for lending, market data querying fees, etc., but it does not disclose the specific reasons for the significant decline, so no further inference can be made.

During the same period, the total operating costs and sales management expenses decreased by 35.6%, but the decrease in costs still did not keep up with the drop 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 noticeable change was in marketing expenses. Bithumb's sales and promotion expenses dropped from 117.07 billion Korean won (approximately 82.33 million USD) in the same period of 2025 to 34.89 billion Korean won (approximately 24.54 million USD), a reduction of about 70%. Clearly, the company has significantly scaled back its efforts to attract users through rewards and subsidies.

However, several relatively fixed costs did not decrease concurrently. Payment fees still amounted to 46.26 billion Korean won (approximately 32.53 million USD), a year-on-year decrease of only about 2%; wage expenses were 30.91 billion Korean won (approximately 21.74 million USD), a year-on-year decrease of about 6.5%.

This set of numbers reveals an easily overlooked issue: exchanges can quickly cut activity rewards, but it is much harder to reduce payment, technical, compliance, and personnel costs at the same pace.

When market transaction volumes decline, this heavily fee-dependent structure directly reflects on the revenue side. Cutting marketing investment can protect some profits but cannot resolve the issue of concentrated revenue sources.

Total assets shrank by 584 million USD, 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 USD) at the beginning of the year to 24.9 trillion Korean won (approximately 17.52 billion USD), a half-year reduction of 831.469 billion Korean won (approximately 584.3 million USD).

At first glance, this drop in assets is more alarming than the net loss. However, the exchange's balance sheet cannot be fully understood in the same way as ordinary companies because a significant portion of both assets and liabilities comes from customer deposits.

Compared to the end of 2025, Bithumb's recorded member won deposits decreased from 20.4 trillion Korean won (approximately 14.30 billion USD) to 13.2 trillion Korean won (approximately 9.273 billion USD), a reduction of 715.581 billion Korean won (approximately 502.9 million USD), which accounts 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 USD), but the company simultaneously increased short-term financial products by 80 billion Korean won (approximately 5.622 million USD).

Thus, a large portion of the asset reduction corresponds to the decrease in customer won deposits and the company's reallocation between cash and short-term financial products.

Another easily confused area is the relationship between Bithumb’s own crypto assets and the crypto assets held in custody for customers.

As of the end of June, Bithumb’s book value of self-owned crypto assets was approximately 194.099 billion Korean won (approximately 1.364 million USD); meanwhile, customer-held crypto assets amounted to approximately 12.05 trillion Korean won (approximately 8.468 billion USD).

The market value of customer-held crypto assets declined from 17.90 trillion Korean won (approximately 12.581 billion USD) at the beginning of the year to 12.05 trillion Korean won (approximately 8.468 billion USD), a drop of approximately 32.7%. However, a decline in market value does not directly equate to a massive withdrawal of customer assets. During the same period, the numbers of BTC, ETH, and XRP held in custody by Bithumb all increased; for example, the reported per-unit price of BTC decreased by approximately 30.5% at the end of the financial reporting period. This indicates that the decline in the market value of held assets is at least partially affected by falling prices, and cannot be judged solely based on changes in total market value.

Conclusion

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

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

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