• The decision to delist was made because the company provided “false information” in response to an investment warning.
• Wemade is best known for its hit franchise The Legend of Mir, which peaked at over 200 million sign-ups and includes one of the world’s most popular blockchain games, Mir 4.
The WEMIX Token Plunges 70% After Delisting From Korean Exchanges
Upbit, South Korea’s largest cryptocurrency exchange, has delisted Wemade Entertainment’s native token following an audit that revealed errors in the company’s disclosure of the number of tokens outstanding. In a press conference, Wemade CEO Chang Hyun-guk decried the decision as “gapjil” — Korean for abuse of power — vowing to fight Upbit’s ruling in court. The move comes a month after Wemix was flagged with an Investment Warning by DAXA because of discrepancies between the number of tokens that were to be distributed according to company disclosures and the actual number outstanding.
On Thursday, news broke that Wemix had lost 95 percent of its value since November, and the company’s stock took a nose dive.CEO Chang Hyuk-guk had reassured investors that the possibility of delisting was “almost zero” in a press conference held just days before, but according to one DAXA official, Chang’s comment actually had a negative influence on DAXA officials and led to Thursday’s decision. The official told Block Media that Chang’s assurance “that ‘Wemix will not be delisted’ had a negative effect.” But now it remains to be seen how Wemix will recover from this significant blow.
According to Upbit, numerous errors were found in the files submitted by Wemade, including inconsistencies in the content of those files. Upbit Exchange said it had lost trust in Wemade management’s abilities, leading to the delisting decision. Wemade has 30 days to appeal the ruling, it is not yet clear how this setback will impact Wemade’s plans to launch a $50 million blockchain fund or its proposed tokenization of $1 billion worth of movie intellectual property rights.
“On January 12th, 2021, it was announced that the WEMIX token would be delisted from Korean exchanges. This decision was made because the company provided “false information” in response to an investment warning.”
Wemade is best known for its hit franchise The Legend of Mir, which peaked at over 200 million sign-ups and includes one of the world’s most popular blockchain games, Mir 4.
The events leading up to the delisting started on December 28th, 2020 when the Korea Financial Intelligence Unit (KoFIU) sent out an investment warning about Wemade. In response to this warning, Wemade issued a statement on December 31st claiming that the company had no involvement in any illegal activities. However, it was later revealed that this statement was false and that the KoFIU had actually requested more information from Wemade about their cryptocurrency business before issuing the warning.
As a result of providing false information, the Korea Exchange (KRX) decided to delist the WEMIX token from its exchanges. This news caused the price of the token to plunge by 70%.
The Impact of Delisting on Wemade’s Business
The delisting of the WEMIX token from Korean exchanges is likely to have a negative impact on Wemade’s business. For starters, it will make it more difficult for people to trade the token. This could lead to a loss of confidence in the company and cause the price of the token to drop even further. Additionally, delisting usually results in a loss of liquidity for a company, which could make it difficult for Wemade to raise capital in the future.
It’s also worth noting that this isn’t the first time that Wemade has been in hot water with regulators. In 2019, the company was fined 2.5 billion won (approximately $2.1 million) by South Korea’s Fair Trade Commission for violating anti-competitive laws. This latest incident is likely to damage Wemade’s reputation further and make it even harder for the company to recover from its recent struggles.
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