South Korean crypto exchanges saw operating profits fall 78% in the first half of 2026 as trading activity, market valuations and customer deposits declined, according to new data from the Korea Financial Intelligence Unit (KoFIU). The reading matters because it shows how directly the revenue of Korea's registered exchanges is tied to domestic trading activity, which contracted across volume, valuations and deposits in the period.

On Thursday, KoFIU said average daily trading volume at domestic virtual asset exchanges fell 44% from the previous six months, while market capitalization dropped 33% and won-denominated deposits fell 35%. Exchange sales declined 41% over the same period, even as the number of accounts eligible to trade rose slightly by 0.4%. Operating profits fell at nearly twice the pace of sales — 78% versus 41% — leaving the sector's bottom line under more pressure than its top line.

KoFIU's survey covered 26 registered virtual asset service providers, including 17 exchange operators and nine custody and wallet providers, and covered activity from Jan. 1 through June 30. Virtual asset service providers in South Korea are required to register with KoFIU under the amended Act on Reporting and Using Specified Financial Transaction Information, which took effect in March 2021. Exchanges that offer won trading must also hold real-name banking contracts, a system in place since January 2018 under which users can trade only through accounts identity-verified by an exchange's partner bank.

The figures come amid signs that South Korean retail investors have been shifting attention from crypto to the country's stock market — a dynamic with direct relevance for the exchanges, whose domestic business has historically been driven by retail, won-denominated trading.

In May, the value of crypto held by South Korean investors fell 50.2% to 60.6 trillion won ($41.4 billion) over roughly a year. Korean outlet ChosunBiz linked the decline to capital moving toward stocks.

A Cointelegraph analysis in July also found that combined average daily volume across Upbit, Bithumb, Coinone, Korbit and Gopax — South Korea's five major registered exchanges, which operate under the country's real-name account system — had fallen about 89% year over year during comparable seven-day periods, while the KOSPI, South Korea's benchmark stock index, had more than doubled over the 12 months to July 22. Upbit, operated by Dunamu, is the largest of the country's registered exchanges by trading volume. Taken together, the regulatory and market data sketch the same backdrop for the sector: less trading, smaller holdings and fewer deposits flowing into exchange revenue.

Cointelegraph contacted Bithumb and Upbit operator Dunamu for comment. As a semi-annual series, KoFIU's next release, covering the second half of the year, will indicate whether the pullback extended into the final months of 2026 or began to level off.

Related: South Korea drops Travel Rule threshold for crypto transfers

This article was first published by Cointelegraph: South Korea Crypto Trading Slumps as Exchange Profits Fall 78%.