South Korean Bitcoin exchange behemoth, Bithumb has published its 2018 financials showing a massive loss of more about 205 billion won (more than $180 million).

The company attributed the poor financial performance to the prolonged bear market conditions that characterized the 2018 cryptocurrency market with prices plummeting across the board by an average of more than 80 percent.

The 2018 bear market also adversely affected companies in the mining and investment sectors of the emerging virtual currency market.

Bithumb

Bithumb Suffers Massive Loss

According to the Korea Times, Bithumb made a net loss of 205.5 billion won ($180.4 million) in 2018. The details of the company’s financial performance formed part of the figures published by BTCKorea.com – operators of Bithumb, on Thursday (April 11, 2019).

The net loss suffered by the Bitcoin exchange giant constitutes a trend reversal from its 2017 performance where it reported a net profit of $427.2 billion won ($376 million). The profit earned in 2017 came as no surprise given the bullish breakout experienced by cryptocurrencies, especially in the latter part of the year.

Also, 2017 saw the emergence of the Kimchi Premium, a mark-up on cryptocurrency prices in South Korea that far exceeded the global average. However, in 2018, the market went in the opposite direction with prices falling by more than 80 percent.


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On the regulatory front, the country’s government also took steps that significantly impacted the bottom lines of platforms like Bithumb. The South Korean government banned all forms of anonymous trading, forcing platforms to employ robust know-your-customer (KYC) and anti-money laundering (AML) protocols. Such measures likely reduced the customer base of exchanges like Bithumb.

Despite the tough market conditions in 2018, the financial disclosure did reveal some positives for Bithumb. Total sales grew by more than 17.5 percent from 2017’s figures to reach 391.7 billion won ($344 million). However, this growth wasn’t enough to stop the company’s operating profit from declining by 3.4 percent to stand at 256.1 billion won ($225 million).

Apart from the dip in profits, the 2018 bear market also reportedly forced the company to make some cuts to its staff strength. Back in January 2019, BTCKorea relieved about 30 employees of their duties at the company.

2019 Off to a Rough Start

In 2019, the cryptocurrency market has been on a significant recovery trajectory with Bitcoin up by more than 40 percent since the start of the year. However, positive price growth aside, 2019 has already gone off to a rough start for Bithumb with the platform suffering another attack by hackers.

In late March 2019, reports emerged that cybercriminals were able to steal about $13 million in cryptocurrency from the platform.

The hack was the second suffered by the company in less than a year with hackers stealing more than $30 million in another attack back in 2018. Preliminary investigations point to the 2019 attack being the work of people with inside knowledge about the company.

According to the Korea Times, Bithumb says it is taking steps to ensure that all of its funds are kept safe from further cyber intrusions. In a statement published on Thursday (April 11, 2019), the company declared that it carried out an external audit in the wake of the March 2019 theft.

An excerpt from the statement reads:

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.”


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Posted by Osato Avan-Nomayo

Osato is a Bitcoin enthusiast who can often be found providing insight on the latest Bitcoin-related news. When he isn't closely monitoring stories in the industry, he is either attempting to beat his scrabble high score or internally debating some existential dilemma.


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