Korea Prosecutes Former Wemade CEO for Withholding WEMIX Token Sales Data

• South Korean prosecutors indicted the former Wemade CEO.
• The former CEO stepped down from his role in March.
• Prosecutors pressed charges for Capital Markets Act violation, citing several allegations.

Former Wemade CEO, Chang Hyun-guk, has been indicted for allegedly falsifying and omitting data relating to the sales of the company’s cryptocurrency , WEMIX.

The South Korea-based blockchain game developer launched WEMIX in 2020 as its native token to power a range of utilities, including governance.

While the token witnessed relative success post-launch, generating $210.6 million in sales within a year, its fleeting glory dwindled when South Korea’s Digital Asset eXchange Association (DAXA) in 2022 designated it as an “investment of caution.” Members of the association later delisted WEMIX from their platforms in 2023, citing inaccurately reported circulation numbers.

A year after this incident, prosecutors revived the matter by pressing charges against the then Wemade CEO, who is currently the company’s Vice President.

Former Wemade CEO Indicted

According to a local news report on August 6, prosecutors indicted Chang Hyun-guk on Monday, accusing him of deceiving consumers by failing to disclose WEMIX sales despite promising to stop issuing the token in 2022. The former CEO had also pledged to publicize the token’s circulation data, which is yet to happen. 

The prosecutors alleged that Wemade unfairly sold WEMIX tokens worth 300 billion won ($217.5 million) between February 2022 and October 2022 without publishing the required disclosure as mandated by the Capital Markets Act.

This was after Chang Hyun-guk reportedly lied to investors that WEMIX liquidity would be suspended from January to February 2022, misleading them into purchasing the token and thus gaining unfair profits.

Per the report, Wemade is also suspected of using WEMIX as collateral to obtain stablecoin-denominated loans from external funds.

Based on these allegations, the Financial Investigation Division 1 of the Seoul Southern District Prosecutors’ Office charged Wemade and Chang Hyun-guk with violations of the Capital Markets Act.

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