South Korea's largest exchange, Upbit, will be acquired by Naver

Korea Blockchain Week (KBW) is underway in Seoul, attracting the attention of global crypto professionals to the South Korean market.

Again, according to a report by the Dong-A Ilbo on Thursday, South Korean internet giant Naver plans to conduct a share swap with Upbit's parent company, Dunamu. This move will make Dunamu a subsidiary, meaning that South Korea's largest internet company will control the country's largest cryptocurrency exchange.

Currently, South Korea's crypto market is experiencing unprecedented activity. The total number of user accounts on the top five exchanges has exceeded 9.6 million, representing approximately 18.7% of the country's population. Upbit holds over 80% of the market share, with daily trading volume regularly exceeding $10 billion. The Korean won has become the second-largest fiat currency for cryptocurrency trading globally, second only to the US dollar.

Earlier this month, at the Upbit Developer Conference, Dunamu launched the Web3-based blockchain GIWA Chain and GIWA Wallet. This Layer 2 solution, based on OP Rollup technology, highlights Upbit's ambitious technological developments. This share swap wasn't without warning: In July of this year, the two parties announced a collaboration to develop a Korean won stablecoin; in September, Naver acquired a 70% stake in Dunamu's securities trading platform. These moves were seen as preludes to a full acquisition.

Dunamu is currently valued at approximately 8.26 trillion won (approximately $6 billion). If the transaction goes through, it would be the largest merger and acquisition in the history of the Korean crypto industry. As South Korea's largest internet company, with a market capitalization of approximately $50 billion, Naver's position in the country is comparable to the combination of Google and Tencent. It not only monopolizes 70% of the search engine market but also has built a vast internet ecosystem through a range of products.

Chinese users may not be familiar with the name Naver, but most are familiar with LINE, Naver's instant messaging app. With over 200 million users in Japan and Southeast Asia, it is one of Asia's most important social platforms. However, Naver's business scope extends far beyond this.

Naver Pay, launched by its fintech subsidiary, Naver Financial, is South Korea's largest mobile payment platform, with 30 million users, covering more than half of the country's population. From online shopping to offline payments, from money transfers to financial management, Naver Pay has become deeply integrated into the daily lives of South Koreans.

Like other global tech giants, Naver, with its search engine as its core entry point, continues to expand its service offerings, building an ecosystem that users cannot leave. In the financial sector, Naver has accelerated its expansion in recent years: establishing Naver Financial in 2019, launching digital banking services in 2020, and obtaining a securities brokerage license in 2024. In September of this year, Naver Pay acquired a 70% stake in Securities Plus Unlisted, a subsidiary of Dunamu, for 68.6 billion won. The acquisition of Upbit is the final crucial piece in Naver's financial puzzle.

If the transaction goes through, Naver will have payment tools (Naver Pay), securities trading (Securities Plus), cryptocurrency trading (Upbit), and the upcoming Korean won stablecoin.

This vertically integrated system will enable users to complete a full range of financial transactions, from fiat to cryptocurrency, within the Naver ecosystem. More notably, with LINE's user base of over 200 million overseas, this system has the potential to expand beyond the Korean market and reach across Asia.