Naver Financial acquires Upbit in South Korean tech, digital finance merger

South Korea’s fintech firm Naver Financial, the subsidiary of Naver Corp., has agreed with Dunamu, the parent company of crypto exchange Upbit, to proceed with a comprehensive stock swap.

On Thursday, local news outlet Yonhap News reported that the transaction is expected to be approved by both companies’ boards in the coming weeks, which will give Naver control of Upbit. 

The news led to a small rally in Naver Corp. shares (KRX), which climbed as much as 11%, now trading at around 247,000 won ($176) after news publications shared reports of the planned takeover.

Naver to take control of Upbit via stock swap

A stock swap allows two companies to exchange shares, creating a governance structure similar to that of a parent and subsidiary. Much different from traditional mergers financed in cash, it enables an acquisition by using equity as the primary vehicle, effectively folding Dunamu under Naver’s fintech umbrella.

Upbit, launched in 2017, is ranked as South Korea’s largest cryptocurrency exchange by trading volume and users, with more than 180 listed assets and over 300 trading pairs. Naver Pay is among the most popular digital wallets in the country, competing with Kakao Pay, Toss, and major banks.

Both sides see the deal as a springboard for a deeper push into the financial services industry, including South Korea’s stablecoin market.

Naver Financial already processes annual payment volumes worth 80 trillion won ($58 billion), as it is one of the country’s most used digital wallets. Using its reach with Upbit’s $2.9 billion daily volumes would make it the fourth-largest crypto exchange in trading activity.

A source with knowledge of the stock swap deal said the new entity will cover nearly every corner of consumer finance, including shopping, payments, and crypto trading at large.

The companies have previously cooperated on the development of a won-pegged stablecoin. Sources close to the talks said that the planned merger will see the two firms formalize those efforts and will further pursue international business and partnerships in the coming months.

“The two companies are each expected to soon hold board meetings to approve the comprehensive stock swap,” a person familiar with the matter told reporters in a press briefing earlier today.

Rival Bithumb signs US partnership during Blockchain Week

The announcement comes against the backdrop of the Korea Blockchain Week, a digital assets conference taking place in Seoul, hosted by Web3 ecosystem developer FACTBLOCK.

On Wednesday, Bithumb, the country’s second-largest crypto exchange and Upbit’s main domestic rival, unveiled a partnership with World Liberty Financial, the US President Donald Trump family crypto venture.

World Liberty Financial plans to launch a debit card and retail application “very soon,” co-founder Zak Folkman said during a panel at the conference. In collaboration with Bithumb, the card could link the WLFI’s stablecoin, USD1, with payment platforms from the US, including integration with Apple Pay.

According to the company, the retail application will merge peer-to-peer transfers with trading functions. The partnership was formalized through a memorandum of understanding with Bithumb.

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