Business

Dan Taylor

Embattled crypto exchange Bithumb posts $35M profit in H1 2018

South Korean cryptocurrency exchange Bithumb ran up first half profits of $35 million, ten times smaller than profits for the previous accounting year, in the wake of a high-profile hack on the exchange in June.

The news emerged indirectly through a filing by a company called Vidente, which owns 10.5% of the firm, in a financial disclosure to South Korean regulators, Yonhap reported. The figures will be seen as further embarrassment for the embattled exchange, which has been suffering the effects of the hack and a separate investigation into allegations of tax offenses.

According to the figures, Bithumb, once considered the biggest cryptocurrency exchange in the world, posted revenues of $270 million for the period before deductions, with operating profits of $194 million and a net of around $35 million.

While no comparisons with the same period last year were available, local news agency Yonhap has confirmed the firm’s net profit for the entirety of 2017 stood at $380 million—over 10 times greater than the first half of 2018.

The poor financial performance was perhaps unsurprising, after the damaging hack of a number of weeks ago. Some $31 million in cryptocurrency was stolen during the attack, although Bithumb claimed to have recovered $14 million since.

It remained unclear from the figures whether the hack was accounted for in these results, although some analysts have suggested the losses would likely be deferred to the next accounting period.

The results also coincide with the conclusion of South Korean government’s investigations into the crypto exchange’s alleged tax evasion, resulting in a fine of $28 million in June.

The news marks the latest blow for the firm, which has seen trading volumes plummet over the last few months. From the third largest exchange on January 2, Bithumb was recorded as 19th in the last 24 hours of trading by volume, with just $71.7 million traded through its exchange.

Bithumb was also forced to refuse new customer accounts following the hack, which led to a drop in trading volumes of around 40% within a week, as a result of banking restrictions brought against the firm.

With a number of challenges still to overcome, it remains to be seen whether the second half will be any brighter for Bithumb.

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