South Korea's Largest Exchange Upbit To Be Acquired By Naver As Crypto Market Enters "Chaebol Era"

Korea Blockchain Week is heating up in Seoul, drawing crypto industry professionals' attention to South Korea. At this pivotal moment, South Korean media outlet Dong-A Ilbo reported Thursday that internet giant Naver plans to conduct a share swap with Dunamu, the parent company of Upbit, which would make Dunamu its subsidiary. This means South Korea's largest internet company will control the country's biggest crypto exchange.

South Korea's crypto market is experiencing unprecedented activity, with the top five exchanges surpassing 9.6 million user accounts, representing about 18.7% of the total population. Upbit commands over 80% of the market share, with daily trading volumes frequently exceeding $10 billion. The Korean won has become the world's second-largest fiat currency for crypto trading, trailing only the US dollar.

Earlier this month at the Upbit Developer Conference, Dunamu unveiled its Web3-based blockchain GIWA Chain and GIWA wallet. This Layer 2 solution built on OP Rollup technology demonstrates Upbit's technological ambitions beyond traditional exchange operations.

The share swap transaction shows clear warning signs of a planned acquisition. In July, both parties announced a collaboration to develop a Korean won stablecoin. In September, Naver acquired a 70% stake in Dunamu's securities trading platform. In hindsight, these moves appear to have been strategic preludes to a full acquisition.

Dunamu currently holds a valuation of 8.26 trillion Korean won ($6 billion). If the deal proceeds, this would mark the largest merger and acquisition in South Korean crypto industry history, fundamentally reshaping the country's digital asset landscape under traditional corporate control.

Naver: The South Korea Google

Naver is South Korea's largest internet company, with a market capitalization of $50 billion.

In South Korea, Naver's position is equivalent to Google. It monopolizes 70% of the search engine market while building a massive internet ecosystem through its various products.

Most non-Korean users may not be familiar with the name Naver, but they certainly know LINE. LINE is a Naver subsidiary with over 200 million users in Japan and Southeast Asia, making it one of Asia's largest instant messaging platforms.

Naver's business empire extends far beyond this.

Naver Financial is its fintech subsidiary, and its Naver Pay 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 wealth management, Naver Pay has become deeply embedded in South Koreans' daily lives.

Similar to other global tech giants, Naver acquires users through its core platform (search engine) and then continuously expands services to create an ecosystem that users find difficult to leave.

In the financial sector, Naver has been accelerating its expansion. It established Naver Financial in 2019, launched digital banking services in 2020, and obtained a securities brokerage license in 2024. This September, Naver Pay acquired a 70% stake in Securities Plus Unlisted, a Dunamu subsidiary, for 68.6 billion Korean won.

Now acquiring Upbit represents the final piece of Naver's financial empire puzzle. Once completed, Naver will possess:

• Payment tools (Naver Pay)

• Securities trading (Securities Plus)

• Crypto trading (Upbit)

• The upcoming Korean won stablecoin

This vertical integration enables Naver to provide users with comprehensive financial services spanning from fiat currency to crypto. More importantly, through LINE's 200 million overseas users, this system could potentially expand beyond South Korea to cover the entire Asian market.

When Chaebols Meet Web3

Naver's acquisition of Upbit is not an isolated case. This represents one of the latest examples of South Korean conglomerates making comprehensive entries into the crypto market.

Kakao's strategy began even earlier. It launched the Klaytn blockchain in 2019 and promoted the Klip wallet through KakaoTalk's 50 million users. The KLAY token currently ranks among the top 50 globally by market cap. Last September in 2024, Klaytn announced a merger with Finschia chain, previously developed by LINE, to form the new Kaia chain.

Samsung took a hardware approach. Starting with the Galaxy S10 in 2019, Samsung phones have featured built-in crypto wallet functionality. Samsung SDS simultaneously provides blockchain solutions for enterprise clients. While Samsung doesn't directly operate an exchange, its infrastructure-level positioning is clearly visible.

Traditional financial institutions are also accelerating their market entry. In August, eight banks including KB Financial and Shinhan Financial announced a joint Korean won stablecoin development project. This timing came exactly one month after Naver and Dunamu announced their stablecoin collaboration.

This conglomerate-dominated landscape is hardly surprising in South Korea.

South Korea's economy has long been dominated by large corporate groups, with the top ten chaebols contributing the majority of the country's GDP. When new industries emerge, these large enterprises typically enter quickly and establish dominant positions.

Dunamu was founded in 2012 and launched Upbit in 2017. In South Korea's market environment, it's no small feat for an independent company to develop to an 8.26 trillion Korean won valuation. Choosing to join the Naver ecosystem now may be a strategic decision in the face of increasingly fierce competition.

Based on historical patterns, South Korean conglomerates entering the crypto market exhibit several characteristics:

• Massive and rapid resources. Kakao took only about one year from deciding to develop blockchain to launching the Klaytn mainnet. Naver moved from announcing stablecoin collaboration in July to preparing a full Dunamu acquisition in just over two months.

• High coordinated government policies. The South Korean government suspended its central bank digital currency project this year, instead supporting private sector stablecoin development. This policy shift coincided with major enterprises accelerating their crypto business expansion.

• Independent ecosystems. Naver has its payment system, Kakao has its blockchain, and the banking consortium plans its own stablecoin. Each group constructs relatively closed systems, making user migration between different ecosystems costly.

This model results in increasingly concentrated market share.

Based on public data, Upbit once captured 73% of South Korea's trading volume, with Bithumb accounting for about 25%, while the remaining market share was divided among exchanges like Coinone and Korbit. With Upbit's acquisition by Naver, market concentration may increase further.

Chaebol dominance, rapid advancement, and pragmatic focus - South Korea has its own crypto industry development model.

You might think this seems somewhat centralized, but South Koreans don't appear to mind. Nearly 20% of South Koreans participate in crypto trading, and they care more about convenience and security.

The "New Chaebol Era" of Global Crypto Markets

Based on public data, Upbit once captured 73% of South Korea's trading volume, with Bithumb accounting for about 25%, while the remaining market share was divided among exchanges like Coinone and Korbit. With Upbit's acquisition by Naver, market concentration may increase further.

This chaebol dominance, rapid advancement, and pragmatic focus represents South Korea's unique crypto industry development model. While some might view this as overly centralized, South Koreans don't appear to mind. Nearly 20% of South Koreans participate in crypto trading, prioritizing convenience and security over decentralization ideals.

The phenomenon extends far beyond South Korea, as the global crypto market experiences a transformation from grassroots entrepreneurship to giant monopolization. In the Middle East, Binance received investment from Abu Dhabi's sovereign wealth fund this year, with market rumors suggesting billions of dollars despite undisclosed amounts. Dubai's royal family supports multiple crypto projects, positioning the emirate as the "global crypto capital," while Saudi Arabia's Public Investment Fund actively deploys blockchain investments.

The United States follows a different trajectory, with traditional finance gradually absorbing the crypto market to transform it into another asset class. As government attitudes toward crypto become increasingly friendly, major Wall Street institutions pivot accordingly. BlackRock launched a Bitcoin ETF, Fidelity provides crypto custody, and Goldman Sachs began crypto trading operations.

While Coinbase remains relatively independent, its institutional business accounts for an increasing proportion, with retail traders no longer dominating trading activity. Japan presents a more nuanced situation, where Rakuten acquired a crypto exchange in 2018 and SBI Holdings operates one of the country's largest crypto platforms. However, unlike South Korean chaebols' aggressive approach, Japanese conglomerates maintain relatively conservative crypto positioning, resembling defensive investments.

These different regional models reflect varying understandings of crypto, yet produce similar outcomes: independent crypto companies face shrinking survival space while attractive crypto assets see growing institutional holdings. Major centralized exchanges and crypto infrastructure companies, particularly stablecoin issuers, increasingly accept large investments from traditional capital or seek public listings to meet compliance requirements and attract incremental users.

Bitcoin and Ethereum have become coveted assets for corporate crypto treasury strategies, illustrating how the market is stratifying into distinct layers. The upper layer operates as an institution-dominated, compliant, and centralized market featuring ETFs, custody services, and licensed exchanges. The lower layer remains community-driven, experimental, and decentralized, housing perpetual DEXs and meme tokens.

Mainstream markets fall under big capital control, serving ordinary users and institutions, while fringe markets maintain decentralization and continue technological innovation. Whether this stratification benefits or harms the crypto ecosystem remains an open question without simple answers.

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