Wemade Faces Setback in Cryptocurrency Trading
Gaming company Wemade from South Korea is on a challenging path as it faces a significant setback: a court in Seoul has denied its plea to prevent the removal of its cryptocurrency, WEMIX, from major exchanges in the country. The ruling was made by the Seoul Central District Court on May 30, effectively allowing the token’s trading support to be fully terminated by June 2.
Background of the Delisting
This legal decision follows a critical announcement from the Digital Asset eXchange Alliance (DAXA), which comprises five prominent South Korean exchanges: Upbit, Bithumb, Coinone, Korbit, and Gopax. The alliance indicated that WEMIX would be delisted following a major security breach reported in February.
“Hackers withdrew over 8.65 million WEMIX tokens, valued at approximately 9 billion won (around $6.2 million), from the company’s Play Bridge Vault—an essential component of its Web3 framework.”
Following this breach, DAXA found that Wemade did not adequately address transparency and user safety standards, rendering its explanations and proposed compensation inadequate.
The exchanges decided to reevaluate the token in March and April, leading to a delisting plan announced in May. By June 2 at 3:00 p.m. Korean Standard Time, trading support for WEMIX will cease, although holders can withdraw their tokens until July 2.
Wemade’s Legal Battle and Response
Wemade attempted to counter this decision in court on May 9, arguing the ruling was unjust and requesting an injunction. However, the rejection of its appeal means the delisting will move forward as scheduled.
In the wake of the court’s ruling, the WEMIX team expressed remorse but stated its intention to press on:
“We are very sorry about the outcome of this injunction application, but we accept the court’s decision.”
The company acknowledged the repercussions stemming from the Play Bridge Vault hack and extended apologies to its users, committing to bolster security measures and ensuring the stability of its blockchain gaming ecosystem.
Future Strategies and Market Implications
WEMIX functions as the primary currency within Wemade’s blockchain gaming and DeFi platforms. The loss of listings on local exchanges presents a significant challenge. Yet, Wemade remained optimistic about overcoming this hurdle, asserting:
“No external factors can weaken our resolve to maintain and develop the WEMIX ecosystem.”
The company plans to continue its operations without interruption, promising to deliver real value through its games and services associated with WEMIX. They have pledged to outline both short and long-term strategies to address the implications of the delisting and to fortify the ecosystem.
The ramifications of losing its market presence in South Korea are significant. Local exchanges represent a majority of the cryptocurrency’s trading volume, and this transition jeopardizes access to both liquidity and investors. While WEMIX remains available on international platforms like Bitget and Bybit, trading activity on these sites is comparatively minimal compared to the South Korean market, known for its sharp focus on cryptocurrencies. Additionally, existing regulations imply that WEMIX cannot be relisted on South Korean exchanges for at least a year.
