- Bithumb saw an 80% decrease in YoY operating profits for Q1 2023.
- Bithumb's net profit surpassed its operating profit.
- The exchange is under investigation for alleged bribery.
Seoul-based crypto exchange Bithumb has seen a significant drop in operating profits for Q1, 2023. According to BanklessTimes.com, Bithumb's operating profits were $12.11 million, marking an alarming 80% YoY return drop. The sharp decrease raises concerns about the exchange's performance.
Jonathan Merry, the CEO of BanklessTimes, commented on the data:
The decline in operating profits casts doubt on Bithumbs' performance in the coming days. It also highlights the challenges the crypto industry faces amidst ongoing market turbulence. The bribery allegations involving Bithumb employees add further scrutiny to the situation. However, Bithumb will overcome these setbacks and emerge victorious.BanklessTimes CEO, Jonathan Merry
Bithumb’s Net Profit Stood at $30.2 Million
Sales for the first quarter reached approximately $37.8 million, while the operating profit stood at around $12.11 Million. Despite the gloomy sales figures, Bithumb managed to rake in a net profit of $30.2 million, surpassing the operating profit. The prices of the company's virtual assets experienced a rise since the previous quarter. So, while their operational performance took a hit, the increase in asset prices offset some of the losses, resulting in a substantial net profit.
Bithumb Saga Investigations
Prosecutors are scrutinizing Bithumb employees for accepting payments to list specific virtual currency on the exchange. The prosecutors raided their office, seizing and searching the office premises along with a suspect named Lee. The spotlight currently shines on Mr Lee, a key figure within this virtual asset exchange.
As the investigation unfolds, all eyes remain on the developments surrounding Bithumb. Investors are observing how this alleged bribery scandal will play out.
Why the Slump
The slump in Bithumb's YoY operating profits is due to several factors. First, the crypto market has been relatively volatile in recent months, with prices fluctuating wildly. This has made it difficult for exchanges like Bithumb to generate stable profits.
Besides, Bithumb has faced increasing competition from other crypto exchanges worldwide. As more players enter the market, Bithumb has struggled to maintain its market share and attract new clients.
Moreover, Bithumb has been beset by internal issues. There has been management turnover and a need for clear strategic direction. These issues have made it difficult for the company to make the necessary investments in technology, marketing, and other areas.
Finally, Bithumb has been the target of cyber attacks in recent years. These have resulted in the loss of user funds and led to customer dissatisfaction, which has damaged its reputation. As a result, the company has had to invest heavily in security protocols to protect users and their funds.
Contributors
