As Naver Financial decided to acquire Dunamu, the operator of the virtual asset exchange Upbit, it faces reviews by financial authorities and the Fair Trade Commission.
Park Sang-jin, CEO of Naver Financial, said at a press briefing on the 27th that "we are communicating sufficiently with the authorities and will coordinate regarding concerns." Naver Financial will obtain 100% equity in Dunamu through a stock exchange with Dunamu, setting June 30 next year as the exchange date. Naver and Dunamu plan to navigate the authorities' approval process for about seven months.
Approval procedures by financial authorities and the Fair Trade Commission include: ▲ approval for a change of major shareholder under the Credit Information Act ▲ submission of a securities registration statement ▲ the Fair Trade Commission's corporations merger review ▲ a change report for virtual asset service provider (VASP) due to the merger.
Among these, the biggest stumbling block is seen as "segregation of finance and virtual assets." This segregation is a measure to ensure that the price volatility of virtual assets does not affect financial companies. Although not a regulation specified in law, it is a principle observed by financial authorities. There is also a view that, because Naver Financial is hard to regard as a traditional financial company, this segregation will not be a major stumbling block.
In the Fair Trade Commission's corporations merger review, antitrust issues could surface. Dunamu's Upbit and Naver Financial's Naver Pay are dominant players in their respective industries. The Fair Trade Commission's review defines the product market and scope affected by the merger and considers changes in market share, higher entry barriers, and potential harm to innovation. There are voices that a combination of dominant players could restrict competition.
While the Fair Trade Commission's decision on the merger is expected in the first half of next year, the review period could lengthen if the two companies expand their business scope, such as issuing stablecoins. The review period for corporations mergers is 30 days from the filing date and can be extended within 90 days if necessary.
Dunamu plans to hold a shareholders' meeting for approval of the comprehensive stock exchange after receiving the authorities' approval. It also decided to hold a separate briefing session for shareholders before the shareholders' meeting to fully gather shareholder opinions.
Dunamu and Naver Financial each held a board meeting the previous day and decided to exchange 1 Dunamu share for 2.54 Naver Financial shares.