TLDR
- Naver is pursuing a stock swap acquisition of Upbit operator Dunamu
- Upbit commands 80% of South Korea’s crypto trading market
- Naver shares rose 7% to 246,000 Korean won after acquisition news broke
- The deal would create South Korea’s largest fintech-crypto alliance
- Both companies plan overseas expansion with won-pegged stablecoin projects
South Korea’s internet giant Naver is close to acquiring Dunamu, the company behind the nation’s largest cryptocurrency exchange Upbit. The potential deal represents one of the biggest fintech acquisitions in Korean history.
Naver Financial is negotiating a comprehensive stock swap with Dunamu’s shareholders. This arrangement would make Dunamu a full subsidiary of Naver’s financial division without requiring cash payments.
The acquisition talks have already impacted markets. Naver stock jumped over 7% to 246,000 Korean won ($175) when news of the potential deal emerged.
Upbit dominates South Korea’s cryptocurrency landscape with over 80% market share in recent years. The exchange ranks fourth globally by trading volume, processing billions in daily transactions.
Naver Financial handles 80 trillion Korean won ($58 billion) in annual payments through its digital wallet services. Combining this with Upbit’s crypto dominance would create a comprehensive financial platform.
Strategic Partnership Foundation
The two companies already collaborate on key projects. They are jointly developing a won-pegged stablecoin for the South Korean market.
Both firms view the acquisition as a launchpad for international expansion. Naver aims to compete with global fintech giants through enhanced crypto capabilities.
The timing aligns with Korea Blockchain Week in Seoul, highlighting South Korea’s growing crypto sector prominence. The event has attracted international investors and industry leaders.
Upbit faces increasing competition from rival Bithumb. On September 9, Bithumb captured 46% market share while Upbit held 50.6%, showing a tighter competitive landscape.
Bithumb recently partnered with World Liberty Financial, a crypto venture connected to US President Donald Trump. This partnership adds pressure on Upbit to strengthen its market position.
Market Dynamics and Regulation
South Korean lawmakers have criticized Upbit’s market dominance as potentially monopolistic. The exchange’s control over crypto trading has drawn regulatory scrutiny.
Naver operates Korea’s second-largest digital payment platform after Kakao Pay. Adding crypto trading would position Naver to offer integrated financial services including payments, investments, and digital assets.
The South Korean government is developing regulations for won-backed stablecoins. This regulatory framework could benefit both companies’ collaborative stablecoin initiative.
Naver’s existing ecosystem includes search, e-commerce, cloud services, and digital payments. Integrating Upbit would complete Naver’s transformation into a full-service digital financial platform.
The acquisition discussions occur during increased institutional adoption of cryptocurrency in South Korea. Major corporations and financial institutions are expanding crypto services.
Industry analysts view the potential merger as reshaping Korea’s fintech competitive landscape. The combined entity would challenge traditional banks and other digital payment providers.
Current market conditions favor the acquisition timing. Cryptocurrency trading volumes have stabilized after previous volatility, creating a more predictable business environment.
The stock swap structure allows both companies to maintain operational flexibility while creating synergies. Dunamu shareholders would receive Naver shares, maintaining equity participation in the expanded business.
