The Financial Supervisory Service (FSS) of South Korea has issued a critical correction order to Dunamu, the operator of the country's largest cryptocurrency exchange Upbit. The order mandates Dunamu to correct "significant omissions or false statements" in its public disclosure regarding a landmark comprehensive stock swap with Naver Financial, the fintech arm of internet giant Naver Corporation.
The regulatory action, confirmed in March 2025, specifically identified problems in two sections of Dunamu's filing: 'Future corporate restructuring plans' and 'Other important matters related to investment decisions.' The FSS determined that these deficiencies meant investors received incomplete or misleading information about the transaction's implications, violating standards under South Korea's Financial Investment Services and Capital Markets Act.
The proposed deal, first announced in November 2024, would see Dunamu become a wholly-owned subsidiary of Naver Financial. Existing Dunamu shareholders would receive shares in Naver Financial in exchange for their stakes, with external valuers setting the corporate value ratio between the two entities at 1 to 3.064569. The broader merger has been valued around $14.5 billion, with Dunamu's implied valuation in the $10 billion range.
The strategic merger aims to combine Naver's extensive user base and payments infrastructure (Naver Pay) with Dunamu's dominance in crypto trading, controlling over 70% of South Korea's crypto volumes. However, the transaction now faces multiple hurdles. Naver Financial has already pushed the timetable back by roughly three months, with a shareholder vote now slated for August 18, 2025, and closing expected on September 30, citing "approval procedures and improvement of laws."
Beyond the disclosure order, the merger is under scrutiny from the Korea Fair Trade Commission (KFTC) for antitrust review and is threatened by the impending Digital Asset Basic Act. Proposed rules within this new framework, expected to take effect in 2026, could introduce ownership caps for major shareholders of virtual asset exchanges—potentially as low as 15–20% for individuals and 34% for corporations. This would make Naver Financial's planned 100% control of Dunamu "unfeasible," according to industry commentary. Dunamu CEO Oh Kyoung‑suk acknowledged the potential impact but stated the company would "proceed as originally planned regardless."
The FSS correction order creates immediate operational and reputational challenges for both companies, potentially delaying the transaction further and causing investors to question management transparency. It also signals heightened regulatory vigilance in South Korea's fintech and digital asset sectors, setting a benchmark for disclosure compliance as the industry matures and seeks integration with traditional finance.
