Crypto firms are struggling in South Korea

South Korean crypto exchanges Upbit and Bithumb have seen revenues plummet in the first half of the year amid a wider downturn for crypto companies in the country. Meanwhile, South Korea has also banned prediction market Polymarket after concluding that its operations constitute illegal gambling.  

The Block reports that Bithumb recorded an operating profit of 14.9 billion won ($11 million), down 83% from last year’s profit of 90.1 billion won ($64 million).

Its operating revenue this year is 168.8 billion won ($120 million), down almost 49% from last year’s 329.2 billion won ($233 million).

It also suffered a net loss this year of 108.7 billion won ($77 million).

Upbit parent company Dunamu reported a similar drop in operating revenue. It made 408.1 billion won ($289 million) in the first half of this year, a drop of 49% from last year’s 801.9 billion won ($568 million).

Its operating profits were 111.5 billion won ($79 million), an almost 80% drop from 549.1 billion won ($389 million) last year. 

Dunamu said, “The recent decline in performance is attributed to a contraction in liquidity across the global digital asset market, which has led to a weakening of investor sentiment.”

Meanwhile, crypto-based Polymarket has been banned after South Korea’s Media and Communications Commission concluded the platform’s operations constitute illegal gambling. 

The regulator claimed Polymarket crossed an information threshold that is classed as gambling under the Criminal Act and National Sports Promotion Act.

It found that Polymarket’s use of yes-or-no contracts encourages speculative behavior where winnings are reliant on events out of users’ control.

Read more: American Indian tribes want Kalshi and Polymarket off their land

Polymarket argued that it doesn’t manage user funds, that it removed Korean-language services, and that it doesn’t support South Korea’s won fiat currency.

However, the commission said, “Technical features or service methods cannot exempt a platform from domestic legal compliance. Since Polymarket provides a real illegal gambling environment to domestic users, access blocking is unavoidable to protect them.”

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