South Korean Crypto Exchange Profits Plunge 78% in H1 2026 Amid Trading Slump
South Korean crypto exchanges experienced a 78% drop in operating profits during the first half of 2026 amid a significant decline in trading activity, market capitalization, and won-denominated deposits. According to data released by the Korea Financial Intelligence Unit (KoFIU), average daily trading volumes decreased by 44%, while cryptocurrency market cap fell by 33%. Despite this, the number of registered accounts eligible for trading edged up slightly by 0.4%. The downturn coincides with a shift among retail investors from cryptocurrencies to the country's stock market.
KoFIU Data and Market Trends
On Thursday, the Korea Financial Intelligence Unit (KoFIU) released data covering January 1 to June 30, 2026, surveying 26 registered virtual asset service providers, including 17 exchange operators and 9 custody and wallet providers.
Average daily trading volume across South Korean crypto exchanges declined 44% compared to the prior six months. Cryptocurrency market capitalization dropped 33%, while won-denominated deposits decreased by 35%. Exchange sales also fell by 41%, even though the number of accounts eligible to trade rose marginally by 0.4%.
Investor Preferences Shift and Market Impact
Market observers link the downturn in cryptocurrency trading activity to retail investors redirecting funds towards South Korea's stock market.
In May, the total value of crypto held by South Korean investors dropped by 50.2% over approximately one year, down to 60.6 trillion won (about $41.4 billion). South Korean media outlet ChosunBiz attributed this fall to capital moving into stocks.
A July analysis by Cointelegraph reported that combined average daily trading volume across leading exchanges such as Upbit, Bithumb, Coinone, Korbit, and Gopax declined roughly 89% year-over-year for comparable seven-day periods, while South Korea's benchmark stock index, KOSPI, more than doubled over the 12 months through July 22.
Industry Response
Cointelegraph reached out to Bithumb and Dunamu, the operator of Upbit, for comments on the current market conditions. As of yet, no official statements have been provided.
Why it matters
This news highlights the significant decline in profitability and trading activity on major South Korean cryptocurrency exchanges in early 2026. It reflects a shift in investor preferences towards traditional financial markets, such as stocks, reducing liquidity and interest in the local crypto market. This dynamic explains the overall drop in market capitalization, trading volumes, deposits, and exchange revenues. Understanding these trends is critical for investors and regulators alike to adapt strategies and regulatory frameworks to evolving market realities.
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