Naver To Acquire Upbit Through Share-Swap Deal

Naver Financial, the fintech arm of Naver, is set to acquire complete control of Dunamu, the entity operating Upbit, one of the most prominent cryptocurrency exchanges in South Korea. The acquisition will be completed via a share-swap deal.

The acquisition will make Dunamu a wholly-owned subsidiary of Naver Financial, making Naver the direct owner of Upbit.

Naver Financial To Acquire Upbit

South Korean internet giant Naver is all set to acquire Upbit, the country’s largest cryptocurrency exchange. The deal will give Naver full control of Dunamu, the entity operating Upbit through a share-swap deal the firms are preparing to finalize and approve. The acquisition will see Dunamu become a wholly-owned subsidiary of Naver Financial, giving it direct control of Upbit. The share exchange will unify the corporate structure of both companies, making one entity the parent company and the other a wholly-owned subsidiary. However, unlike traditional mergers, both companies will remain legally intact after the transaction.

Details Of The Merger

Naver and Upbit formed a strategic alliance in July to launch a KRW-based stablecoin after regulatory developments and growing government support for won-pegged stablecoins. The partnership also aimed to enhance profitability and influence digital asset policy in South Korea. Local media reports claim both companies have established a dedicated task force to finalize the share swap. Under the agreed terms of the deal, Naver Financial will issue new shares in exchange for the stake held by Dunamu shareholders.

Key Regulatory Developments

News of the merger comes as South Korea continues its efforts to promote its local cryptocurrency industry by settling on a clear regulatory framework. The country is also finalizing efforts to formalize a won-pegged stablecoin market to strengthen its monetary sovereignty in the era of digital finance. The ruling Democratic Party of Korea has also established a digital asset task force, which will be responsible for laying the legislative groundwork for cryptocurrencies. The task force plans to pass the won stablecoin legislation by the end of the year. 

The move by Naver and Upbit to strengthen their ties could be a strategic effort to prepare for regulatory developments and changes, particularly around local stablecoins. It could also allow Naver to integrate Upbit’s infrastructure into its existing financial services.

Upbit had recently faced a three month suspension from South Korean regulators. The suspension restricted user transactions citing compliance violations, and was part of a broader effort to tighten regulatory oversight over crypto. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.