Woofun AI reports that a South Korean presidential regulatory reform panel has recommended creating exceptions in major shareholder eligibility reviews for virtual asset service providers, removing a significant obstacle to Naver Corporation’s planned acquisition of Dunamu, the operator of cryptocurrency exchange Upbit, from Chosun Ilbo.

The recommendation addresses a critical issue that threatened to derail the deal. If South Korea’s Financial Services Commission (FSC) had enforced its amendment as originally drafted, Naver’s acquisition could have fallen through after the company received a first-instance ruling for violating the Fair Trade Act. The panel stated that it was excessive to reject filings uniformly without considering the severity of a major shareholder’s legal violation or whether a dual punishment provision had been applied.

The regulatory reform panel, operating under the Office of the President, urged the FSC to prepare exception rules that would allow for a more nuanced review process. Per Woofun AI, the proposed framework aims to balance investor protection with the need to foster innovation and business growth within the sector.

This move signals a potential shift in South Korea’s approach to regulating the cryptocurrency industry. The amendment’s final details are set to be decided after a multi-step review process involving the FSC, the Ministry of Government Legislation, a vice ministers’ meeting, and a Cabinet meeting. This development is closely watched by market participants and legal experts.

The Naver-Dunamu deal, estimated to be worth hundreds of millions of dollars, represents a significant consolidation in South Korea’s tech and crypto sectors. A favorable regulatory outcome could set a precedent for future acquisitions involving virtual asset service providers, potentially attracting more institutional investment into the space. Conversely, a prolonged review could create uncertainty and dampen deal-making activity.

The panel’s recommendation is a positive step for Naver and Dunamu, but the final outcome remains subject to further regulatory deliberation. The decision will likely influence how South Korea’s financial authorities handle major shareholder reviews for crypto-related businesses going forward, with implications for the broader digital asset ecosystem in the country.