Upbit Acquisition Halted by South Korean Crypto Ownership Rules Clash

The proposed acquisition of Upbit operator Dunamu by Naver Financial has hit a potential roadblock due to conflicting ownership rules in South Korea's crypto sector. The National Assembly Research Service has examined how a cap on major shareholders of virtual asset exchanges could interact with existing subsidiary ownership requirements under the Fair Trade Act.

Under the proposed digital-asset framework, lawmakers are discussing limits on major shareholder stakes at 20% in principle, with up to 34% potentially allowed under specified conditions. However, this would conflict with the Fair Trade Act's requirement for holding companies to own at least 50% of an unlisted subsidiary and at least 30% of a listed subsidiary.

Naver Financial is not currently a holding company, but if it later meets the requirements, lawmakers or the companies could face a need to reconcile the two systems. The research service has called for lawmakers to examine user protection, market fairness, corporate governance, investment incentives, and interaction with existing laws when setting any final ownership restriction.