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Executive Summary
- DAXA (Digital Assets eXchange Alliance), which is the joint consultative group consisting of the 5 major exchanges in Korea that operate KRW market (Upbit, Bithumb, Coinone, Korbit, and Gopax), decided to delist Wemix, the native token of gaming company Wemade’s blockchain platform Wemix, alleging the firm provided false information in response to an investment warning that was issued on Wemade and had caused confusion among investors by providing erroneous and insufficient information. Wemade filed for a preliminary injunction during the court trial on December 2nd, and the Seoul Central District court started reviewing the injunction to withdraw the decision from DAXA to delist WEMIX. It is reported that the court will make its decision on December 7th. If the Seoul Central District court does not rule in favor of Wemade, the gaming giant’s WEMIX tokens will be removed from the five crypto exchange platforms.
As the controversy around the virtual asset ‘WEMIX’ intensifies, all eyes and ears are on the court’s decision regarding the request made by Wemade, which filed for a preliminary injunction during the court trial on December 2nd. The Seoul Central District court started reviewing the injunction requested by game publisher Wemade to withdraw the decision from South Korea’s top five crypto exchanges to delist WEMIX, a token issued by the game company’s blockchain platform. It is reported that the court will make its decision on December 7th. If the Seoul Central District court does not rule in favor of Wemade, the gaming giant’s WEMIX tokens will be removed from the five crypto exchange platforms.
On November 24th, DAXA (Digital Assets eXchange Alliance), which is the joint consultative group consisting of the 5 major exchanges in Korea that operate KRW market (Upbit, Bithumb, Coinone, Korbit, and Gopax), decided to delist WEMIX, the native token of gaming company Wemade’s blockchain platform Wemix, alleging the firm provided false information in response to an investment warning that was issued on Wemade and had caused confusion among investors by providing erroneous and insufficient information. DaXA announced that they would terminate contract support for WEMIX, with trading set to end on December 8th.
In the investment warning issued on October 27th, DAXA alleged that there was considerably more WEMIX in circulation than Wemix had disclosed, and Wemix had pledged to work with DAXA to alleviate these concerns.
After news of the decision to delist was announced, WEMIX Communication released a statement, claiming it had sincerely responded to requests and concerns raised by DAXA and corrected a number of issues where they believe the circulating supply had been overstated. WEMIX Communication added that the WEMIX team does not acknowledge or agree with the unreasonable decision made by DAXA, and that it is crucial to note that the foundation has not circulated a single WEMIX more than what Wemade have officially disclosed so far.
Henry Chang, the CEO of Wemade, accused Upbit of orchestrating the token’s delisting. Speaking at an online press briefing, Chang also claimed to not have been formally notified about the decision to delist the token. Chang argued that when Wemade received the investment warning, it asked Upbit for its standard or guideline for circulation, but it has not received anything to this day.
Wemade filed for a preliminary injunction on DAXA, arguing that DAXA’s decision was a result of an unfair collusion. Seoul Central District court said that it will make a decision before the evening of December 7th.
This case may mark the beginning of disclosure regulation being used at the discretion of Korean cryptocurrency exchanges to safeguard customers. Future court decisions and precedents may increase market predictability for virtual assets, which will have an impact on the market’s service providers. It remains to be seen if the court will recognize the exchanges’ right to independently regulate virtual assets. It’s important to keep a close eye on how this case develops and how the courts rule.
Updated December 8, 2022: The Seoul Central District Court ruled that the delisting of Wemix was justified
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