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Naver Financial Acquires Crypto Exchange Upbit in $2 Billion Deal

South Korean internet giant Naver Financial has officially confirmed its acquisition of leading cryptocurrency exchange Upbit in a deal valued at over $2 billion.

The move marks a major push by Naver, the parent company of messaging app Line, into the fast-growing digital asset space. Upbit is one of the largest crypto exchanges in South Korea, with a market share of over 80% in the country. The acquisition will allow Naver to leverage Upbit's established user base and regulatory approvals to expand its financial services offerings.

"This deal represents a significant milestone in Naver's strategy to become a leading fintech player in Asia," said Naver Financial CEO Kim Sang-hun. "Upbit's best-in-class technology and strong brand recognition will be a powerful complement to our existing financial services."

Under the terms of the agreement, Naver will acquire a 57% stake in Upbit's parent company Dunamu. The two firms have been strategic partners since 2017, with Naver previously owning a minority stake in Dunamu.

Industry analysts say the tie-up makes strategic sense, as Naver looks to diversify beyond its core internet business into high-growth areas like digital payments and crypto trading. Upbit, meanwhile, gains access to Naver's extensive user base and resources to fuel its global expansion.

"This is a win-win deal that combines Naver's digital expertise with Upbit's crypto exchange capabilities," said Kevin Cho, a senior analyst at Seoul-based research firm FnGuide. "It positions the combined entity as a formidable player in the burgeoning digital asset market, both in Korea and internationally."

The acquisition comes as crypto exchanges globally face heightened regulatory scrutiny. However, industry experts believe Upbit's strong track record of compliance will help navigate this landscape.

"Upbit has consistently demonstrated its ability to work constructively with policymakers," added Cho. "This should provide Naver with a solid foundation to expand its crypto services while adhering to evolving rules and standards."

The deal is expected to close in the first half of 2023, subject to regulatory approvals. Once complete, Naver plans to integrate Upbit's platform into its existing financial services ecosystem, which includes digital banking, wealth management and payment solutions.