Naver Reaffirms Dunamu Merger, Signals Flexibility Amid Regulatory Scrutiny

At its recent shareholder meeting, Naver reconfirmed its plan to merge with Dunamu, the operator of Upbit, but stated it may adjust the deal's structure in response to regulatory changes.

The merger faces two major regulatory hurdles: a potential 20% cap on crypto exchange ownership being discussed by the government and an ongoing antitrust review by the Fair Trade Commission.

The market initially reacted negatively to the ownership cap news, but the outlook now depends on whether regulators will impose strict conditions or allow for a more flexible approach with grace periods.

Naver has officially reaffirmed its commitment to merge with Dunamu, the operator of Korea's largest crypto exchange, Upbit.

At its shareholder meeting on March 23, 2026, Naver's leadership sent a clear message: the deal is moving forward, but its final form will adapt to the evolving regulatory landscape. This statement was crucial for calming investor nerves after a period of uncertainty, confirming both a strong intention to merge and a pragmatic willingness to adjust the deal's structure to satisfy regulators.

Two major regulatory challenges are shaping this deal. First is the government's proposal to cap a single shareholder's stake in a crypto exchange at 20%. News of this potential cap in early March caused Naver's stock to fall sharply by nearly 12%. However, the price has since partially recovered. This is because discussions now include a possible three-year grace period or differentiated caps based on market share, suggesting a softer landing rather than an immediate, rigid rule.

Second, the merger is under an antitrust review by the Korea Fair Trade Commission (KFTC), which began in November 2025. The KFTC is examining the market power of a combined Naver Pay and Upbit. While Upbit's dominant market share is a concern, regulators will also consider countervailing factors, such as growing competition from rivals like Bithumb and Upbit's temporary market share dip following a security breach. Dunamu's past record on security and anti-money laundering (AML) compliance will also lead to close scrutiny of its internal controls.

Ultimately, Naver's announcement signals a strategy of flexible compliance. The company is preparing for potential conditions from the KFTC, such as creating data firewalls between Naver Pay and Upbit. It is also ready to redesign the ownership structure to align with the final version of the shareholder cap rule. The base case scenario is that the deal proceeds on schedule by late June 2026, but with specific regulatory conditions attached.

Antitrust Review: An investigation by a government agency (like the KFTC) to ensure a merger or acquisition does not create a monopoly or unfairly reduce competition.
Behavioral Remedies: Conditions imposed by regulators on a merging company, requiring it to change its business practices (e.g., establishing data firewalls) to prevent anti-competitive behavior.
KoFIU (Korea Financial Intelligence Unit): A government agency under the Financial Services Commission responsible for anti-money laundering (AML) and combating the financing of terrorism (CFT).

Naver Reaffirms Dunamu Merger, Signals Flexibility Amid Regulatory Scrutiny

At its recent shareholder meeting, Naver reconfirmed its plan to merge with Dunamu, the operator of Upbit, but stated it may adjust the deal's structure in response to regulatory changes.

The merger faces two major regulatory hurdles: a potential 20% cap on crypto exchange ownership being discussed by the government and an ongoing antitrust review by the Fair Trade Commission.

Naver has officially reaffirmed its commitment to merge with Dunamu, the operator of Korea's largest crypto exchange, Upbit.

Antitrust Review: An investigation by a government agency (like the KFTC) to ensure a merger or acquisition does not create a monopoly or unfairly reduce competition.
Behavioral Remedies: Conditions imposed by regulators on a merging company, requiring it to change its business practices (e.g., establishing data firewalls) to prevent anti-competitive behavior.
KoFIU (Korea Financial Intelligence Unit): A government agency under the Financial Services Commission responsible for anti-money laundering (AML) and combating the financing of terrorism (CFT).