Woori Technology, a noted South Korean venture capital entity, is contemplating divesting its interest in Dunamu, the parent organization of Upbit, which stands as South Korea’s leading cryptocurrency trading platform. In 2015, Woori made a significant investment of 5.5 billion KRW in Dunamu, obtaining an undisclosed percentage of shares. Nearly a decade later, their stake has grown to approximately 7.22%, estimated to be worth around 425.3 billion KRW or $300.7 million in the over-the-counter (OTC) market. This potential sale raises eyebrows, as projections suggest that the selling price could well exceed the current market valuation, potentially yielding over 100 times the initial investment.
Reports indicate that Woori is targeting international investors in light of challenges faced in garnering financial backing from local sources. This strategic move could reflect a broader trend where South Korean firms increasingly seek to navigate the complexities of the domestic market, especially given the evolving concerns surrounding the crypto industry. By considering a sale through a block deal— a method that allows for large transfers to occur without impacting market value—Woori seems to be taking a calculated approach to mitigate any adverse market manipulation that could emerge from such a significant transaction.
This move by Woori coincides with a tumultuous phase in South Korea’s cryptocurrency markets, marked by government scrutiny over platforms like Upbit. Authorities are investigating several alleged KYC (Know Your Customer) violations in addition to examining the company’s overarching influence in the local market. This heightened regulatory focus adds a layer of complexity to the potential sale and implies that Woori’s divestment could be motivated by a desire to distance itself from any forthcoming obligations or liabilities stemming from increased regulation.
Simultaneously, the South Korean crypto market is witnessing a notable uptick in trading volumes stirred by ongoing political volatility. On December 3, President Yoon Suk Yeol enacted emergency martial law, which he promptly rescinded mere hours later. This brief yet impactful declaration triggered a flurry of trading, with analysts suggesting that it led to massive Bitcoin sell-offs, reported at around 18 billion KRW within the first half hour immediately following the announcement.
The consequences of these events have sparked a notable surge in trading across various platforms. Upbit, in particular, experienced a staggering increase in trading volume, with reports indicating a 44.7% rise, resulting in nearly $28 billion transacted within just 24 hours. Other exchanges, like Bithumb and Coinone, mirrored this trend, indicating a broader shift in market activity within the region. With such volatility and trading activity on the rise, Woori Technology’s decision to sell its stake could impact not just its financial strategy but also influence the competitive dynamics of the South Korean crypto landscape.
As South Korea’s crypto environment fluctuates under external pressure from political decisions and internal regulatory scrutiny, Woori’s move is emblematic of a larger narrative about investment and risk management in an increasingly volatile marketplace.
