Upbit dividends 5.3 billion won to major shareholder...Bithumb operating margin 46.8 percent

With the general downturn of the cryptocurrency market, profits of local cryptocurrency exchanges suffered. Although the number of transactions increased as the price of Bitcoin rose from 4 million won in early 2019 to 16 million won by late June, the downturn hit in the second half. Upbit and Bithumb reported 42.2 billion won and 67.7 billion won in operating profit respectively last year, but these numbers are down 85 percent for Upbit and 74 percent for Bithumb from a year earlier. The cryptocurrency exchange is a good business if done well. Upbit reported a 40 percent operating profit margin last year, while Bithumb reported 46.8 percent, which means that Upbit made 300 won for every 1,000 won of sales, and Bithumb raised 468 won from the same amount. Kospi-listed companies raised only 51 won per 1,000 won on average last year. Song Chi-hyung, Dunamu founder and CEO and Upbit’s large shareholder, earned 5.3 billion won just from Upbit dividend. #Bithumb loses a lot of Ripple Bithumb was the most profitable exchange last year. Its sales reached 144.6 billion won, down from 391.7 billion won a year earlier, and operating profit fell from 256.1 billion won in 2018 to 67.8 billion won. But the company turned to black in terms of net profit last year, as the 205.7 billion won net loss shifted to 37.3 billion won net profit. The operating margin reached 46.8 percent, which is twice the 21.6 percent reached by Samsung Electronics last year. One thing noticeable in the annual report is the amount of cryptocurrency in inventory. Bithumb’s stock of Altcoin fell to one-tenth of what it was a year earlier. Bithumb said the reason is because the fee s went from being charged in cryptocurrency Korean won. If it receives transaction fees in cryptocurrency, the company’s profit can vary depending on market situation. Bithumb changed the fee base currency to reduce the volatility of its profit. By end of 2018, the top three cryptocurrencies held by Bithumb were Ripple (9.69 billion won), Ethereum (6.76 billion won) and Eos (5.36 billion won). By the end of last year, that became Bicoin (7.14 billion won), Ethereum (2.38 billion won) and Eos (1.34 billion won). The amount of Bithumb’s Ripple fell to 469 million won. #Upbit pays out 8 billion won in dividends to shareholders in two years Even after experiencing the large-scale loss last year, Bithumb’s operator Dunamu reported 42.3 billion won in operating profit and 11.67 billion won in net profit. But its revenue fell from 479.5 billion won in 2018 to 140.2 billion won last year, losing the top sales position to Bithumb. RootOne Soft reported a 1.26 billion won operating loss last year. RootOne Soft was acquired by Monstercube, the operator of restaurant finder service Soda Play. Dunamu paid out a total of 626 won per share in. The total amount paid out is 20 billion won, which is more than what Dunamu recorded in net profit last year. Dunamu said the dividend was paid out based on the company’s performance in 2018, which is when Dunamu recorded 140.6 billion won in net profit. CEO Song Chi-hyung, who holds 26.8 percent, or 8.56 million shares, of Dunamu, earned 5.36 billion won in dividends last year. The dividend for 2018 was 2.65 billion won, which means he was paid around 8 billion in dividends over the past two years.

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