November 29, 2024

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Wemade headquarters in Gyeonggi Province (Yonhap)

A Seoul court on Friday started reviewing a preliminary 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.

This petition for a preliminary injunction was filed on Monday after the Digital Asset Exchange Alliance (DAXA) comprised of five crypto exchanges -- Bithumb, Upbit, Coinone, Korbit and Gopax -- announced on Nov. 24 they would halt trading Wemix tokens on their platforms starting Dec. 8.

The court is expected to make a decision before this set delisting day.

When making the delisting announcement, the alliance cited that Wemix filed “false information,” suspecting there were considerably more tokens in circulation than the firm had disclosed. Wemix also provided its investors with “erroneous and insufficient information,” according to DAXA.

According to the alliance, the delisting decision was inevitable as the gaming company did not transparently disclose its transactions. Earlier in January, Wemade sold 108 million Wemix tokens worth around 227.1 billion won ($ 174.9 million) without noticing investors. Additionally, the company in October issued around 70 million more tokens than it reported. The alliance said they warned Wemix in October to provide accurate information, but the gaming giant failed to heed DAXA’s request.

Wemade CEO Chang Hyun-guk on Monday strongly claimed that the decision was Korea’s largest cryptocurrency exchange Upbit’s "gapjil," referring to abusive and unfair action conducted by people in positions of power toward those under their influence and thus resulted from an “unfair and obscure” process.

DAXA immediately rebutted the CEO’s claim and said the decision was made unanimously by the alliance after Wemade failed to heed their request.

Wemade did not back down and argued the data they filed with the exchanges did not have any problems. Wemade filed a petition for a preliminary injunction.

If the court does not rule in favor of Wemade before Thursday, the gaming giant’s Wemix tokens will be removed from the five crypto exchange platforms.

By Song Seung-hyun (ssh@heraldcorp.com)