South Korea's "first internet stock" Naver acquires Upbit's parent company, with the local largest encryption exchange aiming for a NASDAQ listing.

Author: Zen, PANews

The South Korean technology industry and the cryptocurrency sector are witnessing the largest integration to date. On November 26, South Korean internet giant Naver announced that it has agreed to acquire Dunamu, the operator of South Korea's largest virtual asset exchange, Upbit.

After the announcement, Naver's stock price rose by 7.7% in after-hours trading. Naver stated that this move aims to “build a future growth engine based on digital assets.” This acquisition had been rumored in the South Korean media weeks before the official announcement, which had temporarily pushed up Naver's stock price. Senior executives from both sides reportedly engaged in multiple rounds of negotiations behind the scenes to bridge valuation differences and regulatory concerns.

It is worth noting that just as the market was buzzing with rumors of a merger, the global cryptocurrency market showed signs of weakening, with the market capitalization of digital assets falling by over $1 trillion from its peak. The fluctuations in the macro environment added uncertainty to the deal, but both parties ultimately chose to join forces.

Naver and Upbit merge, a super financial platform in South Korea is imminent.

According to the regulatory documents submitted by Naver on the same day, the acquisition will be conducted through Naver's fintech subsidiary Naver Financial, with each share of Dunamu stock exchangeable for 2.54 newly issued shares of Naver Financial. Based on this exchange ratio, the equity valuation of Dunamu is approximately 15.1 trillion won (about 10.3 billion USD), while Naver Financial is approximately 4.9 trillion won (33.47 billion USD).

This merger will allow Dunamu to become a wholly-owned subsidiary of Naver Financial through a share swap. After the transaction is completed, Naver's shareholding in Naver Financial will be significantly diluted from the current approximately 70% to about 17%. Song Chi-hyung, the founder and chairman of Dunamu, will nominally become the largest shareholder of Naver Financial due to holding a large number of shares in Dunamu, but he and the vice chairman will delegate more than half of their voting rights to Naver to ensure Naver retains control over the merged financial subsidiary (approximately 46.5% of the voting rights).

In other words, although Dunamu is formally incorporated into Naver Financial as the major shareholder, actual control remains in the hands of Naver Corporation. This arrangement protects the rights of Naver shareholders while allowing the management of Dunamu to become important stakeholders through shareholding, laying a foundation for future integration.

According to the preliminary timetable announced by both parties, Naver Financial and Dunamu plan to hold a shareholders' meeting on May 22, 2026, to vote on the stock swap merger plan. If shareholders approve, the final stock swap delivery is expected to be completed by June 30, 2026. The transaction also needs to pass the antitrust review by the Korea Fair Trade Commission (FTC) and approval from financial regulatory authorities for changes in major shareholders.

To protect the interests of minority shareholders, the plan sets up a dissenting shareholder buyback request right—dissenters can request the company to buy back their shares of Naver Financial at a price of 117,780 Korean won per share between May 22 and June 11, 2026. If the total amount of buyback rights exercised exceeds 1.1 trillion Korean won (approximately 751 million USD) and both parties do not adjust the plan, the transaction may fall through.

However, given the current market reactions and the prospects of the two companies, the likelihood of large-scale shareholder dissent is low. On the regulatory side, since Upbit holds a dominant position in the South Korean cryptocurrency market, the FTC may conduct a strict evaluation of the market concentration post-merger, particularly focusing on whether it harms consumer interests. However, some viewpoints suggest that incorporating Upbit into Naver, which has a good relationship with the government, might actually reduce regulatory resistance. Overall, against the background of the South Korean government gradually improving cryptocurrency regulations and adopting a relatively warmer attitude in recent years, the policy risks associated with this merger are gradually decreasing.

The “marriage” between Naver and Dunamu is seen as a significant milestone in reshaping the landscape of technology and finance in South Korea. As South Korea's “internet giant” and a national-level gateway platform, Naver has been frequently expanding in areas such as payments, cloud computing, artificial intelligence, and content in recent years. After the completion of this acquisition, Naver will incorporate the emerging field of cryptocurrency trading into its portfolio, while Upbit can leverage Naver's vast user ecosystem for empowerment. Both parties plan to create a comprehensive super platform that integrates search, communication, payments, and virtual asset trading, embedding digital assets into various aspects of daily life for South Koreans.

Specifically, Naver currently has the Naver Pay payment platform with an annual transaction volume of over 180 trillion won, which is expected to integrate with Upbit's cryptocurrency trading features, providing users with a one-stop financial service from fiat currency to cryptocurrency. Moreover, in the area of stablecoins pegged to the won, which has been a long-term research focus for Naver's financial department, the completion of the acquisition will undoubtedly accelerate the realization of this plan. In addition, both parties plan to invest 10 trillion won (approximately 6.8 billion USD) over the next five years to build next-generation financial infrastructure based on the integration of AI and blockchain.

It is worth mentioning that shortly after the official announcement of the acquisition, around 04:42 local time on November 27, 2025, approximately $36.81 million worth of Solana network-related assets were transferred to an unknown external wallet by Upbit. Upbit stated that it has confirmed the scale of the loss from the asset theft incident and plans to fully compensate using the assets held by Upbit to ensure that user assets are not affected.

Crisis: The Weakness of the Crypto Market and the Sole Challenger Bithumb

As the main player in this acquisition, Upbit is currently the undisputed leader in the virtual asset trading sector in South Korea. According to statistics from the Financial Supervisory Service (FSS) of South Korea, the cumulative trading volume on the Upbit platform reached 833 trillion won (approximately 642 billion USD) in the first half of 2025, accounting for 71.6% of the total cryptocurrency trading volume in the country.

This market share puts Upbit in a de facto monopoly position, with the established exchange Bithumb following closely behind at a trading volume of 300 trillion won and a market share of 25.8%, while the remaining local platforms combined account for less than 3%. Looking globally, thanks to the fervent investments from Korean users, Upbit has consistently ranked among the top in global cryptocurrency trading volume.

However, compared to 2024, Upbit's dominance in the domestic market has experienced a certain degree of decline. This change is closely related to the rebound of its main competitor, Bithumb. Bithumb's market share had fallen to single digits in 2023 due to operational and compliance issues, but since 2024, it has implemented aggressive strategies such as zero fees to attract retail investors, resulting in a rapid increase in market share. Korean media KoreaTechDesk cited data from The Block stating that Upbit's total trading volume in the third quarter of 2025 was approximately $286.4 billion, a slight increase year-on-year; however, Bithumb's trading volume surged from $4.7 billion last year to $12.81 billion.

Analysts have pointed out that Bithumb has been actively competing for users and trading volume in recent years in preparation for its own IPO, and the South Korean cryptocurrency trading market is evolving from a “one strong and many weak” structure to a “dual strong” structure. However, even so, Upbit still has a significant lead over Bithumb by about 40 percentage points. After the news of Naver's acquisition emerged, there was a heated debate around the valuations of the two companies, indicating that the market recognizes Upbit's relatively higher premium and leading position.

Upbit Trading Volume Trends in the Past Year

Bithumb's trading volume trend over the past year

What is even more noteworthy is the change in overall market sentiment—the trading volume indicator has significantly declined compared to last year. At the end of 2024, the South Korean crypto market experienced a wave of frenzied trading: according to statistics, on December 3, 2024, Upbit's daily trading volume skyrocketed to $27.45 billion, setting a historical peak, approximately ten times the usual level. However, following this “crazy night,” market sentiment took a sharp downturn, entering a cooling phase in 2025. In November 2025, Upbit's average daily trading volume was only about $1.78 billion, plummeting 80% from the peak at the end of 2024. Its trading volume has declined for four consecutive months and is trending to fluctuate narrowly in the range of $2 billion to $4 billion.

Upbit's recent decline in trading volume and market share is the result of multiple factors. In addition to a strong challenge from Bithumb, changes in the regulatory environment and shifts in investment preferences may be more significant reasons.

In the second half of 2025, South Korea's Financial Intelligence Unit (FIU) imposed a fine of approximately 35.2 billion won on Dunamu, citing violations of anti-money laundering regulations, including issues with customer identification at Upbit, and ordered a three-month suspension of some of its operations. This incident had a certain impact on Upbit's brand image and the growth of new users.

In addition, this year, the South Korean stock market has experienced a rare bull market, with a large amount of retail funds flowing back from the cryptocurrency market to the stock market, humorously referred to as “the return of the leeks to the good fields.” The tech sector, represented by AI concept stocks, has ignited the market, with the South Korean KOSPI index increasing by over 70% year-to-date and hitting historical highs multiple times. Many young investors who were previously enthusiastic about discussing altcoins are now talking about “AI/semiconductor concept stocks” in Kakao Talk chat groups and Naver forums.

The stock market siphons off speculative funds and attention, which is closely related to the cooling global trends in the cryptocurrency industry. After a strong rebound in the cryptocurrency market starting in 2024, retail investor enthusiasm in South Korea peaked this summer. However, as we enter Q4 of this year, the global cryptocurrency market has weakened again, and this macro backdrop has undoubtedly dampened the sentiment in the South Korean coin market, which is primarily driven by retail investors.

Next stop, aiming for a NASDAQ listing?

After the merger news was released, the market is highly focused on the IPO movements of Upbit's parent company. In fact, rumors of Dunamu's IPO have been around for a long time. As early as the 2021 cryptocurrency bull market, Dunamu's valuation once skyrocketed, and its founder, Song Chi-hyung, rose to the top of South Korea's wealthy list, leading to speculation within the industry that the company had plans to go public.

However, due to the unclear regulatory environment at that time, Dunamu did not take any further action. Subsequently, Dunamu introduced strategic investors including Kakao and HYBE through a targeted capital increase, temporarily alleviating capital demands. When the news of Naver's acquisition of Dunamu was revealed, its plans for a U.S. listing were brought back to the agenda.

According to a report by Bloomberg, Upbit plans to target the Nasdaq for its initial public offering (IPO) after completing its merger with Naver Financial. This news was first disclosed by Bloomberg on November 24, stating that after the merger is completed, Upbit will begin preparations for its listing in the United States.

Although both Naver and Dunamu have not officially responded to this plan, several mainstream media outlets have confirmed this strategic intention through various channels. The Seoul Economic Daily reported that the merged new company may seek to list on Nasdaq, with a valuation potentially reaching $34 billion. If the news is true, this would make it likely to become the first large cryptocurrency exchange in Asia to enter the U.S. capital market.

It is worth mentioning that Upbit's main competitor, Bithumb, is also planning to go public in the United States. Cryptonews revealed that Bithumb is striving to list on Nasdaq as early as 2026, ahead of Upbit. The “listing competition” between the two major Korean exchanges also reflects the ambition of the Korean cryptocurrency industry to move beyond Korea and reach the international stage, gaining recognition from global investors.

From the current situation, Naver's acquisition of Dunamu has not weakened the latter's motivation for going public; rather, it has created more mature conditions for its IPO. Through the merger, Dunamu will become part of Naver's financial sector, aligning its corporate governance and financial transparency with those of publicly listed companies, thereby clearing some obstacles for a future IPO. Naver's endorsement also helps to enhance international investors' confidence in Upbit's business model.

In addition, since the beginning of this year, the acceptance of large cryptocurrency companies in the U.S. capital markets has gradually increased, with Circle, Bullish, Gemini, and Galaxy Digital going public one after another. Coinbase has even been officially included in the S&P 500 Index, becoming the first cryptocurrency exchange to enter the S&P 500.

Upbit chooses this moment to ride the wave of industry momentum, which is also the best opportunity to successfully debut on the Nasdaq stage.