Key Takeaways
- Listed internet giant Naver eyes control of Upbit, South Korea’s largest crypto exchange.
- The agreement showcases the tech firm’s push to strengthen its fintech presence and deepen its role in South Korea’s digital asset space.
- After the deal announcement, Naver shares stood at KRW254,000.00, up nearly 12% as compared to the same time last day.
South Korea’s tech powerhouse Naver Group is reportedly looking to invest in Upbit, the nation’s top crypto exchange. The KRX-listed company is in discussions to acquire a stake in Dunamu, Upbit’s parent firm. Naver’s shares saw a rise of over 12% on Thursday after the acquisition news took to markets, indicating investor optimism.
According to local media reports, the deal would make Dunamu, the parent company of crypto exchange Upbit, a full subsidiary of Naver Financial. This move would bring Dunamu under Naver’s financial wing. The agreement showcases Naver’s push to strengthen its fintech presence and deepen its role in South Korea’s digital asset space.
At the press time, Naver shares stood at KRW254,000.00, up nearly 12% as compared to the same time last day. The firm’s market cap currently stands at KRW37.932 trillion.
Naver’s Upbit Acquisition Likely to Be a Share Swap Deal
The agreement between Naver Financial and Dunamu, the parent firm of the crypto exchange Upbit, is anticipated to be achieved by a stock transfer. Naver Financial would take complete control of the exchange under the deal terms by issuing new shares in return for Dunamu’s current ones.
With the arrangement, Dunamu’s stockholders gain by being connected to Naver’s larger financial ecosystem, while Naver can fortify its fintech division without having to spend money.
Naver’s decision reflects its increasing interest in integrating digital assets into its offerings and developing its position in the fintech industry in South Korea. The agreement can become one of the most prominent collaborations between a crypto exchange and a major tech company if it is approved.
Naver to Buy Upbit: Why is This Deal Important?
Naver Financial is a significant participant in South Korea’s fintech industry, handling yearly payment volumes of about 80 trillion Korean won ($58 billion). This scale combined with Dunamu’s Upbit, the country’s leading cryptocurrency exchange and the fourth largest globally, could result in one of the most significant collaborations between South Korea’s tech and cryptocurrency sectors.
The two companies are already working together on a won-pegged stablecoin project, so they are not starting from zero. By utilising Upbit’s global reputation in the cryptocurrency space and Naver’s fintech reach, they hope to expand into foreign markets and accelerate growth with this partnership.
According to analysts, the action is a crucial step in Naver’s plan to transform from a regional financial player into a major player in the global fintech industry.
Additionally, the move comes when the South Korean crypto markets are seeing increased rivalry. Earlier in the week, Bithumb and World Liberty Financial collaborated to promote the expansion of DeFi globally. The agreement also coincides with a steady increase in the use and adoption of DeFi among South Koreans living abroad.
Upbit has dominated the crypto industry in South Korea for many years. Since 2022, it has occasionally handled more than 80% of the monthly trade volume. Lawmakers have time and again been alarmed by this degree of control because they fear that Upbit’s parent firm, Dunamu, may have too much sway over the exchange market.
This dominance, according to critics, runs the risk of establishing a monopoly, which might restrict competition and have an impact on users. Regulators are closely monitoring Upbit to make sure the market stays fair and competitive for investors and other platforms, even though its success is a testament to its solid reputation for security and dependability.
