The cryptocurrency exchange Bithumb had approximately 240 billion won at the end of last year. Compared to 992 billion won back in 2017, it’s been reduced by almost 75% (750 billion won).
On the 6th of April, Bithumb Korea released their financial audit report on DART. According to the report, it had 240.8 billion won in 2019, 140 billion won less than what used to be 380 billion won in 2018.
Most of the remaining asset are deposited in the customer’s accounts. Out of 240 billion won, customer deposit takes up 198.5 billion won. The exchange has a security deposit which is valued at about 121% of the customer deposit. Excluding the customer deposit, Bithumb only has 38 billion won left. Of the 380 billion won, 232.9 billion won was the customer deposit and 147.1 billion won was the company’s.
The main reason for the significant decrease is due to the tax payment. Bithumb pre-processed the taxes on foreigner’s cash withdrawals, about 73.3 billion won, as a ‘long-term advance payment.’ So the chunk of the cash were withdrawn, however, the company didn’t count it as an expense.
An accountant who wished to remain anonymous said “it is common to handle the expenses at the time of tax payments” and that “in the case of winning the tax dissatisfaction, it would make sense to list it as a non-operating profit or expense in the next year’s audit report.” Following the regulations, Bithumb would have net loss of 36.1 billion won; however, the company announced that they’ve gained a total of 37.2 billion won on the audit report.
In case of losing the tax dissatisfaction, the company would ‘lose’ that 73.3 billion won withdrawal. The anonymous accountant further added that “in the case of the correction disclosure, Bithumb might be able to stop at a net loss of 36.1 billion won, but it won’t be possible unless the auditor changes,” and that “if it’s reflected in the later audits, the loss amount will be based on the time of losing the battle.”
The withdrawals from the existing customers also added to the loss. Last year, a total of 34.4 billion cash withdrawals were made by the customers, which was a significant pitfall for the company compared to 2018. Overall, it seems evident that Bithumb has struggled with its business.
On the other hand, it might be premature to compare the revenues made from last year solely based on the profits from the cryptocurrencies. The market soared high from the end of 2017 to the beginning of 2018, making the profits from January to February of 2018 almost half of annual profit. The representative of Bithumb explained that the “2018 was an exceptional year in which January to February sales accounted for more than half of annual sales,” so “it’d be inappropriate to compare the profits from 2019.”
The official data do not reveal Bithumb’s monthly sales figures. However, the total commission income in 2018 was 389.7 billion won, and it recorded 142.6 billion won last year, which is a significant decrease.
