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Recent data indicates that certain employees at South Korean cryptocurrency exchanges are earning more than personnel at some of the country’s leading commercial banks.
According to News1, the average salaries at the Upbit exchange have “more than doubled” compared to the previous year. The operator of the platform has also distributed over $2.4 million in bonuses to its CEO during the first half of the financial year.
South Korean Crypto Exchange Employees Gain from Crypto Market Surge
The news outlet attributed the increase in employee compensation and salaries to the “boom” in the cryptocurrency market during the first quarter of FY2024.
Analysts believe that a bullish market, driven by the introduction of Bitcoin spot exchange-traded funds (ETFs) in the United States, has contributed to enhanced profits for local exchanges.
Consequently, the outlet reported that “compensation for both executives and other staff” at Upbit’s parent company, Dunamu, “rose significantly.”
The information was gathered by the Financial Supervisory Service (FSS) and released on August 18.
The findings reveal that, on average, Dunamu compensated its 601 employees with just over $99,000 each annually in the first half of this year.
This amount represents a “2.2-fold increase from the 59.44 million won [$44,000] reported in the first half of the previous year,” according to News1.
Salaries Surpass Those of Major Bank Employees
Most of the increase appears to stem from performance-related bonuses, as suggested by the data.
This salary level “surpasses the average annual compensation of staff” at South Korea’s four largest banks: Kookmin Bank (KB), Shinhan Bank, KEB Hana Bank, and Woori Bank in FY2023.
These banks reported average salaries of less than $86,000 in the last financial year.
Furthermore, Upbit’s increasing employee compensation reflects the exchange’s growing profitability during the bull market.
The bull market witnessed the return of the so-called “ant” (retail) investors to South Korean cryptocurrency markets.
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The markets in the country are significantly populated by these small-scale investors, who typically engage in large trades only when token prices experience sudden fluctuations.
These traders are particularly active on domestic platforms like Upbit. As a result, Dunamu recorded an operating income of KRW 531.1 billion ($393.4 million) in the first quarter of 2024.
This marks a 60.5% increase in operating income compared to the fourth quarter of the previous year (KRW 330.7 billion or $245 million).
Upbit Profits Also Increasing
The exchange also reported an almost 40% rise in operating profit compared to the fourth quarter of the previous financial year.
The news outlet noted that Dunamu “seems to have provided its employees with substantial performance bonuses.”
Executives may have been the most prominent recipients: The financial package for Dunamu CEO Song Chi-hyung, including bonuses, amounted to a total of $3.52 million.
South Korea, Japan, US leaders renew pledge to cooperate on regional challenges https://t.co/Lyf8alodk6 pic.twitter.com/ZjG8xLK1Uv
— Reuters (@Reuters) August 18, 2024
This compensation figure for the first half “is more than double that of major financial sector CEOs,” the media outlet highlighted.
For example, the CEO of Citibank Korea received a total of $1.54 million during the same period.
Additionally, the Chairman of Hana Financial Group, Ham Young-joo, received $1.35 million in the same timeframe.
Upbit’s closest competitor, the Bithumb exchange, also recently reported favorable financial results for the second quarter of FY2023.
Trading volumes on South Korea’s Bithumb crypto exchange over the past 12 months. (Source: CoinGecko)
High trading volumes during the bull market have also contributed to enhancing the platform and its financial performance.
Last week, the exchange reported a 639.2% increase in operating profits compared to Quarter 2 of FY2023. Bithumb’s sales also rose by 193.6%, reaching the $180 million mark.
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