Dunamu, Bithumb shares hit yearly lows amid trading slump, tax uncertainty

Shares of Korea’s cryptocurrency exchange operators have hit their lowest levels of the year, with weak trading activity hurting earnings and uncertainty surrounding next year’s crypto tax further dampening sentiment, according to industry officials, Tuesday.

The industry is calling for a tax deferral and clearer rules, but the government is maintaining its plan to begin taxation next year.

According to Naver Pay’s unlisted stock trading platform, shares of Dunamu, the operator of the country’s largest crypto exchange, Upbit, traded at 241,000 won ($181) Tuesday.

The stock edged up from its yearly low of 236,000 won last Friday but remained well below the 370,000 won recorded when its share swap with Naver Financial was announced last November.

Shares of Bithumb, the country’s second-largest exchange operator, are now trading in the 140,000 won range, down from about 350,000 won last November. They have remained weak since an erroneous bitcoin payout in February sent them tumbling to around 220,000 won.

The declines come as subdued cryptocurrency trading continues to strain both companies’ businesses. Bitcoin has attempted to recover but has struggled to sustain momentum, leaving exchange operators struggling to revive earnings.

The firms’ third-quarter earnings are projected to weaken further from the previous quarter. Figures from cryptocurrency data provider The Block showed that trading volume at Upbit contracted 13 percent quarter-on-quarter, while Bithumb recorded an 18 percent decline.

The prospect of cryptocurrency taxation beginning in January has added to investors’ concerns.

Under the planned regime, profits from transferring or lending digital assets will be classified as other income. Net annual gains exceeding a basic allowance of 2.5 million won will be taxed at 20 percent, or 22 percent including local income tax.

As calls for a delay continue, the Ministry of Finance and Economy convened a meeting earlier Tuesday to hear industry views on the tax.

First Vice Finance Minister Kwon Dae-young attended alongside Financial Services Commission officials and experts, as well as representatives of Dunamu, Bithumb, Digital X, Coinone and Streami.

According to the ministry, industry participants urged authorities to establish clear rules to reduce uncertainty for taxpayers and businesses as cryptocurrency transactions become more varied and complex. They also requested sufficient time to develop and test systems for submitting tax data.

Experts stressed that the rules should be fair, reasonable and acceptable to taxpayers.

While pledging to examine the concerns raised, the government reaffirmed its intention to proceed with taxation next year.

“The principle that income should be taxed must be respected. Putting it into practice requires both tax infrastructure and a framework governing the market,” Kwon said. “We will conduct a broad review of readiness, covering cross-border information exchange, tax rules for different types of transactions and procedures to make filing easier.”