Upbit Hack and Billion-Dollar Takeover: South Korea's Largest Crypto Exchange in Focus

Security Incident and Strategic Takeover

South Korea's largest cryptocurrency exchange, Upbit, is currently at the center of two significant events: While the platform must contend with a hack via the Solana network, South Korean internet giant Naver Corp. is planning to acquire Upbit's parent company Dunamu Inc. in an all-stock deal valued at $10.3 billion ^[2].

Hack via Solana Network

On Thursday morning at 4:42 a.m. (Korean time), digital assets worth approximately 44.5 billion Korean Won, equivalent to roughly $30 million, were withdrawn from an unidentified external wallet ^[1]. Various tokens were affected, including SOL, USDC, PYTH, RENDER, BONK, JTO, RAY, ORCA, and LAYER ^[1].

Upbit responded immediately to the attack and transferred all assets to cold wallets to prevent further outflows ^[1]. Part of the stolen funds has already been secured: LAYER tokens worth $8.18 million have been frozen ^[1]. The exchange announced it would cooperate with projects and authorities to block additional stolen funds ^[1].

Deposits and withdrawals are currently suspended while Upbit fully investigates the incident ^[1]. The company assured customers that they will not suffer personal losses, as damages will be compensated from the company's own reserves ^[1].

Billion-Dollar Takeover by Naver

Parallel to the security incident, Upbit's parent company Dunamu faces a strategic repositioning. Naver Financial, Naver's fintech arm, will issue 2.54 new shares for each Dunamu share ^[2]. The combined entity would represent a $13.56 billion fintech powerhouse that combines payment services, digital assets, and AI-driven financial services ^[2].

"The integration of Dunamu will enable us to create strong synergies across AI, search, digital payments, and blockchain technology," explained a Naver representative to The Korea ^[2].

Regulatory Hurdles and Timeline

The shareholder vote on the stock swap agreement is scheduled for May 22, and the transaction is set to be completed by June 30 if approved ^[2]. Approval from Dunamu stakeholders is required, including Chairman Song Chi-hyung (25.53%), Vice Chair Kim Hyoung-nyon (13.11%), Kakao Investment (10.59%), Woori Technology Investment (7.2%), and Hanwha Investment & Securities (5.94%) ^[2].

The deal must undergo several regulatory reviews. The antitrust authority and financial supervisory authorities will examine the stock swap and subsequent merger for market concentration, consumer impact, and systemic risks ^[2]. This process could take a year or longer ^[2].

"We will comprehensively review whether a relaxation of these regulations aligns with global trends," said Kim Sung-jin, head of the Virtual Asset Division at the Financial Supervisory Service ^[2].

Upbit's Market Position

Upbit holds a market share of over 80 percent in the South Korean crypto market ^[2]. South Korea is considered one of the most active retail trading hubs in the global crypto market. The platform ranks among the five largest cryptocurrency exchanges worldwide by trading volume, alongside Binance, Coinbase, Bybit, and OKX ^[2].