South Korea-based crypto exchange Bithumb has posted a net loss for 2018 in a dramatic reversal of fortunes from the previous year, according to reports.
The exchange, which is operated by BTCKorea, reported a net loss of KRW205.5 billion, equivalent to $179 million, reversing a net profit of KRW427 million from the year before, The Korea Times reported. The loss has been attributed to the collapse in Bitcoin Core (BTC) prices in 2018, with Bithumb seeing the value of its holdings diminish accordingly over the period.
At the same time, dwindling trading volumes have caused problems for the exchange, creating a perfect storm of challenging trading conditions for the company.
Operating profit was down 3.4% on a sales increase of 17.5%. The performance led the firm to lay off 30 of its 340 staff back in January, reflecting a growing trend amongst struggling exchanges looking to slash their expenditure.
It follows from the exchange’s high profile hack in June 2018, when some KRW35 billion was stolen from client accounts, before a further 14 billion was stolen in March—an attack Bithumb attributed to former employees.
Korea’s largest crypto exchange attempted to spin the news positively, pointing to a growth in sales amid the challenging financial results. A Bithumb official was quoted by the news outlet saying, “In terms of sales, we saw a 17 percent increase, and we continue to increase overseas investments.”
Following the most recent hack Bithumb announced it had carried out an external audit, in a bid to shore up its public reassurances on security. The company confirmed client assets are held in secure cold storage wallets, with the 14 billion theft affecting only company funds.
In a statement, Bithumb said its due diligence report showed that client funds were being held securely.
“We have stated that we will conduct fair and objective due diligence on all assets that we have through a reliable external Audit. We are pleased to inform you that our members’ valuable assets are managed and maintained in a systematic / safe manner through the attached due diligence report,” according to the crypto exchange.
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