Bitcoin (BTC) Traders Retreat as South Korean Exchange Profits Fall 78%

KoFIU Survey: Profits Down 78%

South Korean crypto exchange operating profits collapsed 78% in the first half of 2026, falling to KRW81.6 billion from KRW374.8 billion, according to the Korea Financial Intelligence Unit (KoFIU), the country's financial intelligence body. The official report, published on Oct. 1, covers 26 registered virtual asset service providers from Jan. 1 through June 30, including 17 exchange operators and nine custody and wallet businesses, and is compiled from company submissions rather than classified as national statistics. Trading activity contracted across the board: average daily trading volume dropped 44% to KRW3.1 trillion from KRW5.4 trillion in the second half of 2025, and exchange sales fell 41% over the same window. Customer cash retreated in parallel. Won-denominated deposits slid 35% to KRW5.2 trillion from KRW8.1 trillion, while the value of crypto held through domestic venues dropped 33% to KRW58.9 trillion from KRW87.2 trillion at the end of 2025. For context, Bitcoin (BTC) price sits near $86,400 at press time per our live monitoring. User numbers moved the other way. KoFIU counted 11.175 million tradable accounts at the end of June, up 0.4% from 11.126 million six months earlier, and the largest user age group shifted from people in their 30s to those in their 40s. Accounts holding under KRW1 million in virtual assets grew by 370,000 to 8.63 million, a pattern pointing to KYC-verified users keeping registrations open even as deposits and trading value drained away.

Won Platforms Hold 99% of Value

Concentration remains extreme. Won-based exchanges held KRW58.5 trillion of the country's KRW58.9 trillion in domestic crypto value at the end of June, leaving coin-only platforms with roughly KRW330 billion, about 0.6% of the total. The gap widens in activity terms: won-market venues processed about KRW3.1 trillion in average daily volume while coin-only exchanges recorded just KRW380 million, and volume fell 44% on won platforms against 55% on coin-only venues. A new turnover metric in the survey put monthly churn at 100% to 201% for won-based exchanges and 2% to 9% for coin-only ones, against 25% for the KOSPI and 43% for KOSDAQ. Liquidity is thinning at the edges. Unique assets in circulation fell 5% to 673, and single-exchange listings dropped to 234 from 296. Those exclusive listings represent only KRW600 billion, or 1% of domestic value, and KoFIU flagged that 93 of them, 40% of the group, each carry market values of KRW100 million or less. Activity beyond the order books weakened too. External transfers from Korean exchanges fell 41% to KRW62.8 trillion from KRW107.3 trillion, with whitelisted overseas wallets accounting for 83% of transferred value and travel-rule transfers 15%. Custody and wallet providers, the businesses safeguarding customer assets on the blockchain, also deteriorated: accounts rose 2% to 792 while assets in custody fell 25% to KRW230.4 billion, and operating losses widened from KRW9.3 billion to KRW18.6 billion. The stock market is the competing draw. Bank of Korea data showed domestic crypto holdings nearly halving from KRW121.8 trillion in January 2025 to KRW60.6 trillion by February 2026, and a Yonhap survey in July put combined daily volume across Upbit, Bithumb, Coinone, Korbit and Gopax at KRW597.8 billion, just 1.59% of the KOSPI's KRW37.6 trillion daily turnover. An August bull market in Bitcoin (BTC) briefly lifted activity, with Upbit's daily volume jumping 273% to $1.84 billion, before cooling again.

22% Gains Tax Looms in 2027

COINOTAG's read of the filing is that South Korea's retail base has not left the market, it has gone quiet: registrations edged up while deposits, volume and custody assets all shrank across the same six months, so the H1 profit collapse tracks activity rather than user flight. The official record makes that linkage explicit, and our desk sees the H1 figures as a liquidity story, not an exodus. The next test arrives on Jan. 1, 2027, when a 22% tax on annual crypto gains above KRW2.5 million takes effect and tax authorities finalize implementation guidance for domestic exchanges. Until then, the sharpest structural risk sits where KoFIU itself placed it, in 93 micro-cap single-exchange listings priced for violent moves.