According to data released by the Korea Financial Intelligence Unit (KoFIU), operating profits for domestic virtual asset exchanges fell 78% during the first half of 2026. The survey, which covered activity from January 1 through June 30 across 26 registered service providers including 17 exchange operators and nine custody and wallet firms, revealed a broad contraction in market metrics. Average daily trading volume dropped 44% compared to the previous six months, while market capitalization decreased by 33%. Additionally, won-denominated deposits fell 35%, and total exchange sales declined 41%, despite a marginal 0.4% increase in the number of accounts eligible to trade.
This downturn coincides with a shift in retail investor attention toward the traditional stock market. In May, the value of crypto assets held by South Korean investors fell 50.2% to 60.6 trillion won ($41.4 billion) over roughly a year, a trend linked by local outlet ChosunBiz to capital migration into equities. A July analysis indicated that combined average daily volume across major platforms such as Upbit, Bithumb, Coinone, Korbit, and Gopax had fallen approximately 89% year-over-year during comparable periods. Conversely, the KOSPI benchmark index more than doubled over the 12 months leading up to July 22.
The sharp decline in profitability underscores the vulnerability of centralized exchange business models to cyclical liquidity shifts and macroeconomic sentiment changes. With trading volumes down nearly half and deposits contracting by over a third, the revenue base for these institutions has eroded rapidly, even as account eligibility remained stable. This suggests that existing users are either reducing their exposure or moving capital out of the crypto ecosystem entirely, rather than new entrants failing to join. The disparity between the slight rise in eligible accounts and the steep drop in active trading volume highlights a potential stagnation in user engagement depth, where registered users may be holding dormant balances or exiting positions without replacing them with new inflows.
