[Desk Column] Ignoring the Company Earning 10 Billion Won a Day

[Asia Economy Reporter Jeon Pil-su] In the first half of the year alone, sales reached 2 trillion won with an operating profit of 1.87 trillion won. The average daily profit exceeds 10 billion won. If a company of this scale is pursuing an IPO, how would participants in the securities market react? Considering the IPO market where tens of trillions of won pour in based solely on future expectations, stock exchanges and securities firms would spare no effort to attract such listings.

Nowadays, as stock exchanges compete globally, competition between countries can also intensify. This is because tax revenue from securities trading is not insignificant. When KOSPI stocks worth 1 trillion won are traded, the transaction tax is 80 million won. For KOSDAQ stocks, it amounts to 230 million won. Looking at the trading volume of the leading stock Samsung Electronics this month, it ranges from 700 billion won on low days to mid-2 trillion won on high days.

During an IPO, securities firms earn astronomical fees from listing charges, interest from raised public funds, and transaction fees after listing. Needless to say, the stock exchange providing the trading "marketplace" also considers companies generating profits in the trillions of won as valuable clients.

However, there is a company that meets these conditions yet remains far from listing domestically. The company is Dunamu, which operates Upbit, the number one cryptocurrency exchange currently experiencing a frenzy. Upbit holds about 80% of the domestic cryptocurrency market, where tens of trillions of won are traded daily. It effectively monopolizes the cryptocurrency trading market. Since it only needs to provide a trading platform and facilitate transactions, most of its sales translate into profits. The operating profit margin exceeding 80% is no coincidence.

In the first half of this year, only nine listed companies posted higher operating profits than Dunamu. Judging by performance alone, it is truly a top-tier company. However, the Korea Exchange is passive about attracting its listing. This is not because Dunamu is reluctant to list. From Dunamu’s perspective, it must list to satisfy institutional investors seeking capital gains. This is why talks of a Nasdaq listing resurface from time to time.

The problem lies in the government authorities’ view of Dunamu, or more precisely, cryptocurrencies. The government does not regard cryptocurrencies as financial products. Although transactions occur and income is generated, taxation is imposed, but since intrinsic value cannot be assessed, they are not considered financial products. As former Financial Services Commission Chairman Eun Sung-soo said, “If you go down the wrong path, adults need to intervene,” cryptocurrencies are perceived as akin to gambling investments.

It is true that a significant number, perhaps most investors, treat cryptocurrency investment like gambling. According to a survey conducted by the research firm Embrain on 1,000 adult men and women, 83.2% responded that the cryptocurrency market is unpredictable. Most of those investing in cryptocurrencies say they trade based on charts and technical analysis rather than intrinsic value analysis.

It is also true that such speculative demand contributes to Dunamu’s daily operating profit of 10 billion won. From the authorities’ standpoint, this may seem undesirable. However, the market is not composed solely of companies aligned with government policies. It is a place where profitable entities gather and trade. Of course, there may be counterarguments asking, “Is profit all that matters?” But if a company pays taxes properly within the law, shouldn’t it be traded on our securities market? It is somewhat bitter that profits from stock trading of companies earning money from the pockets of our citizens end up accruing to the United States.