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 sentiment dampened by weak trading activity hurting earnings and uncertainty surrounding next year’s crypto tax, according to industry officials Tuesday.

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 desperate 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.

Amid growing calls for a delay coming from industry as well as opposition parties and even the ruling Democratic Party of Korea, 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.

The ministry, which has maintained that cryptocurrency taxation will begin as scheduled, signaled a softer stance at the meeting by pledging to further assess tax infrastructure and market conditions, fueling industry hopes for a postponement.

Kwon said advances in technology are driving the rapid emergence of new cryptocurrency services and trading methods, alongside growing cross-border activity.

"Taxation must therefore be carefully structured and implemented to reflect these developments and transaction characteristics while maintaining core tax principles," he said. "Upholding the principle of taxing income requires adequate tax infrastructure and an effective regulatory framework for the market."

He pledged to assess the government’s readiness, including cross-border information-sharing arrangements, tax rules for different transaction types and the ease of filing returns.