South Korean digital currency exchange Bithumb has posted a net profit of KRW37.2 billion (US$30.5 million) for 2019, in a strong set of financial results for the company.
The return to profit follows extensive losses incurred in 2018, which saw the exchange slide US$170 million into the red, after experiencing a significant downturn in its core business.
The 2019 reporting period saw revenues rise to KRW144.6 billion ($120 million), with operating income at KRW67.7 billion (US$55 million).
The results come against a challenging backdrop for digital currency exchanges in South Korea, with trading volumes substantially down in recent months. Bithumb previously reported a drop in transaction volumes of 70% last year from 2017 figures.
Accounting for the turnaround in fortunes, the exchange said its focus on customer experience, plus its ongoing bid to secure local licenses have helped drive the firm back to profitability.
“The Company improved internal productivity by reinvesting funds into the core IT infrastructure, enhancing dev and Anti-Money Laundering (AML) capabilities, and undergoing headcount and organizational restructuring.”
“In Q1 2020, the Company continued outplacement and additional restructuring efforts, thereby continuing the drive to reduce operational expenses.”
During the period, Bithumb also slashed its fees by scraping digital currency charges, reducing volatility risk for its users, as part of improving service to its users.
The exchange is reported to be weighing a move into decentralized finance, as well as dencetralized app services, amid a strategy of increasing diversification as a response to the ongoing challenges for digital currency exchanges.
Transaction volumes in South Korea began to plummet following the introduction of regulation for digital currency exchanges in 2018. As well as the decline in volume at Bithumb, rival exchange Upbit also saw transaction volumes fall by 67% over the period.
With market conditions unlikely to improve for South Korean digital currency exchanges, the annual results have been welcomed by the exchange.
It remains to be seen whether Bithumb can build on its results through 2020, amid increasing challenges for the sector, South Korea and the wider global economy.
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