Shares of South Korea's two biggest cryptocurrency exchange operators are trading near their lowest levels of the year, as falling volumes meet a government that confirmed again on Tuesday it will start taxing crypto gains in January. Dunamu, the operator of Upbit, changed hands at 241,000 won (about $181) on Naver Pay's unlisted stock platform, up only slightly from Friday's yearly low of 236,000 won and far below the 370,000 won marked when its share swap with Naver Financial was announced last November. Bithumb trades in the 140,000 won range, down from about 350,000 won last November; the stock has been weak since an erroneous bitcoin payout in February dragged it toward 220,000 won at the time. The declines, reported by The Korea Times, landed on the same morning the Kospi fell 3.73% in the broader AI-linked selloff that also pulled bitcoin lower.
Volumes are the immediate problem
Figures from The Block put third-quarter trading volume down 13% quarter-on-quarter at Upbit and down 18% at Bithumb, and both companies' third-quarter earnings are projected to weaken further from the previous quarter. Bitcoin has tried to recover but has failed to hold momentum, leaving the exchanges without the volatility-driven retail activity that normally repairs their income statements. The tax question sits on top of that cyclical weakness as a structural one: from January, profits from transferring or lending digital assets will be classified as other income, with net annual gains above a 2.5 million won allowance taxed at 20%, or 22% including local income tax.
The industry met the ministry this morning
The Ministry of Finance and Economy convened a meeting earlier on Tuesday to hear industry views, attended by First Vice Finance Minister Kwon Dae-young, Financial Services Commission officials, and representatives of Dunamu, Bithumb, Digital X, Coinone and Streami. Industry participants asked for clearer rules to cut uncertainty for taxpayers and for enough time to build and test the systems that must submit tax data. The ministry's answer was sympathetic on process but firm on timing. "The principle that income should be taxed must be respected," Kwon said. "Putting it into practice requires both tax infrastructure and a framework governing the market." The government will review readiness across cross-border information exchange and filing procedures, but the January start stands. For the exchanges, that leaves a difficult fourth quarter: volumes to rebuild, a tax infrastructure to fund, and a shareholder base already marking their equity at the year's lows.