The revenue of the two largest cryptocurrency exchanges in South Korea, UPBit and Bithumb, fell more than 50%. Demand for cryptocurrencies in the country has recently fallen sharply.

South Korean cryptocurrency exchanges UPbit and Bithumb revenue fell 70% and 63%, respectively, in 2019. The annual profit of Dunamu, the parent company of UPbit, fell by 93% compared to 2018 to $7.4 million, according to a report posted in the electronic notification system of the Financial Supervision Service (FSS) of South Korea.

According to the parent company that runs the UPBit crypto exchange, the profit of the trading platform decreased after the hack in November 2019, when attackers managed to withdraw $50 million in cryptocurrencies from the exchange. But the main problem of the South Korean crypto-exchange does not lie in the field of security. Its revenue falls amid a sharp decline in consumer interest in cryptocurrencies in South Korea. The monthly trade turnover of the most popular cryptocurrencies in the South Korean market fell by an average of 60-80%.

In the peak months of 2017 and 2018, Bithumb monthly processed transactions worth approximately 1.2 million BTC, which is equivalent to about $7.2 billion. In the peak months of 2019 and 2020, this figure fell to 300,000 BTC. Thus, the decrease in the monthly trading volume of bitcoins fell by 75% on Bithumb.

Upbit finds itself in the similar situation. The monthly bitcoin trading volume on UPbit in the peak months of 2017 amounted to 1.35 million BTC, while in 2020 it fell to approximately 250,000 BTC. Over the past two years, UPbit recorded an average monthly volume of 200,000 BTC.

Lawsuits and allegations of falsification of trading volume also added fuel to the fire.