Upbit Joins Naver as Kakao Faces New Crypto Rivalry

• South Korea’s digital financial system has been redesigned via the acquisition of Upbit by Naver.
• Naver first entered the web3 space by launching its crypto wallet in collaboration with Chiliz in 2024.
• Naver still faces stiff competition from Kakao via its Klaytn blockchain.

Naver Corp. (KRX: 035420), South Korea’s leading search and e-commerce platform, is moving to acquire Dunamu, the parent company of the Upbit exchange, through a comprehensive stock swap. Once completed, Upbit would operate as a subsidiary under Naver. Both companies have already formed a task force to manage the integration.

Following the announcement, Naver shares surged over 10% on Thursday to trade at about 253,000 Korean dollars ($180.5).

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Naver Strengthens its Crypto Portfolio

This is not Naver’s first step into digital assets. In August 2024, Naver launched its first digital asset wallet dubbed Naver Pay Wallet in close collaboration with Chiliz blockchain. The Naver Pay non-custodial wallet was meant to enable tech-savvy South Koreans to manage digital assets and store non-fungible tokens (NFTs).

Acquiring Upbit, the country’s largest regulated crypto exchange, marks a far deeper commitment. Founded in 2017, Upbit has become a cornerstone of South Korea’s digital asset market. Upbit is ranked fourth globally by daily trading volume, behind Binance, Bybit, and Coinbase. In the last 24 hours, it reported $2.83 billion in trades, with the XRP/KRW pair accounting for 11% of that volume.

Regulatory Clearance and Market Position

Upbit operates under South Korea’s Virtual Asset Service Provider (VASP) framework, regulated by the Act on the Protection of Virtual Asset Users (VAUPA) passed in 2024. That means Naver would inherit a fully compliant exchange. 

Earlier this year, Upbit faced a three-month suspension from the Financial Intelligence Unit (FIU), which blocked it from onboarding new customers. The company has since resumed operations and sought to rebuild trust with users.

Competition With Kakao

The acquisition would also reshape competition between Naver and Kakao, the operator of the Klaytn blockchain and the widely used KakaoTalk messaging app. Kakao has long tried to connect traditional web services with blockchain, but Naver’s purchase of a leading exchange gives it immediate scale in trading, custody, and settlement.

With more than 40 million domestic users across its web services, Naver is now in position to funnel that audience toward digital assets through Upbit and Naver Pay Wallet.

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