Days after political trouble in South Korea triggered martial law, tech investment company Woori Technology Investment is reportedly working to unload its nine-year holding in Dunamu, the parent company of the popular cryptocurrency exchange Upbit. The firm, which owns a 7.22 percent stake in Dunamu, is set to exit its investment, local media outlet Bloter reports, but declined to comment on its sale terms.
Thanks to this exit, Woori Technology could sell for a price that is vastly greater than its current shares’ market value and thus secure returns of more than 100 times. The sale will occur via a block deal in which large shareholders can sell stocks outside regular hours to achieve the same effect of not hurting the market.
Woori Technology’s Stake in Dunamu Grows
In buying its stake in Dunamu for 5.5 billion KRW in 2015, Woori Technology got for a song, as the book value of the stake grew to 593.9 billion KRW as of the end of the third quarter this year, or a 108 times jump. Its stake is worth around 525.2 billion KRW (over $300 million, at current OTC market prices).
Regulatory limits on investment options in South Korea are forcing the firm to sell its stake, amid rising difficulties raising funds from local investors. For this, Woori Technology, according to reports, has reached out to attract international investors for the deal.
Notably, it comes after a failed coup attempt in South Korea this week. In reaction to accusations of pro-North Korean sentiment by some members of parliament, President Yoon Suk Yeol declared martial law. But the National Assembly shortly overturned the declaration, lifting the martial law almost immediately. The economic reality may be that this political instability has driven Woori Technology’s decision to unravel its investment in the company, hopes to reduce risks stemming from ongoing domestic uncertainty.
Woori Technology’s exit from Korea’s crypto company Dunamu is a landmark moment in South Korean cryptocurrency: the sale of its stake follows a story of rapid growth and volatility, the question of which is what happens when people spend, speculate, and invest in crypto. The sale outcome and its effect on Dunamu and Upbit will likely have consequences for the domestic market and for global investors who are following closely what’s going on in South Korea’s crypto community.
