Nikolas Sargeant
Naver Financial, the fintech division of South Korea's leading internet conglomerate Naver, is moving forward with plans to acquire Dunamu, the company behind the country's largest cryptocurrency exchange, Upbit. The acquisition will be structured as a subsidiary arrangement through a share exchange deal, with board meetings to approve the stock swap expected imminently, according to reports from South Korean news agencies Yonhap News and Chosun on Thursday.
The strategic acquisition positions Naver, often dubbed the "Google of South Korea," to expand significantly into digital finance services. Following the deal, Naver Financial reportedly plans to launch a Korean won-backed stablecoin project alongside other digital finance initiatives as part of its broader strategy to explore overseas expansion opportunities. The collaboration is viewed as a crucial stepping stone for Naver's ambitions to become a global fintech company.
The move comes at a favorable time for South Korea's cryptocurrency sector, which has benefited from increasingly supportive regulatory conditions. Eight major South Korean banks announced plans in June to launch a won-pegged stablecoin by late 2025 or early 2026, while the Bank of Korea's deputy governor has expressed support for banks serving as primary stablecoin issuers. The crypto-friendly environment has been bolstered by President Lee Jae-myung's administration, which has advanced various crypto-related legislation including bills to legalize stablecoins.
Market reaction has been overwhelmingly positive, with Naver's stock surging over 11.4% to 254,000 Korean won ($181) following the acquisition reports. Upbit currently ranks as South Korea's largest crypto exchange by trading volume and customer base, and fourth globally with $2.9 billion in 24-hour spot trading volume. The South Korean cryptocurrency market is projected to reach $1.1 billion in revenue for 2025, with crypto exchange users in the country surpassing 16 million and potentially reaching 20 million by year-end.
The acquisition comes amid growing concerns about market concentration around Upbit's dominance in South Korea's crypto sector. K Bank, a prominent neobank that relies heavily on Upbit for approximately 20% of its deposit balance, has struggled with multiple failed IPO attempts partly attributed to this "excessive dependence" on the crypto exchange. The partnership between K Bank and Upbit, while highly profitable during the pandemic, has raised sustainability questions among regulators and investors about the risks of crypto market volatility. With the K Bank-Upbit partnership agreement set to expire in October, several traditional banks are reportedly evaluating opportunities to challenge this arrangement, suggesting the broader banking sector views Upbit's market position as potentially vulnerable to disruption.
