Wemade Ex-CEO Acquitted in Wemix Manipulation Case
South Korean authorities have ruled against former Wemade CEO Jang Hyun-guk, acquitting him of charges related to the manipulation of the WEMIX cryptocurrency token’s circulation. A ruling delivered by the Seoul Southern District Court on Tuesday, as reported by News1, determined that Jang did not possess the intent to influence cryptocurrency market prices through deceptive practices. This significant legal outcome represents a victory for Jang, who has since transitioned to a role within the blockchain gaming company Nexus. The case centered on allegations that Jang orchestrated a false announcement of a halt to WEMIX token liquidations, an action designed to bolster investor confidence and stabilize the asset’s price. However, the court ultimately found insufficient evidence to substantiate these claims of intentional manipulation.
The legal proceedings stemmed from indictments filed against Jang in August 2024, alleging he fabricated and omitted crucial information concerning the circulating supply of WEMIX tokens. Specifically, he was accused of deceiving consumers and failing to adequately disclose token sales, despite having previously promised to cease selling tokens as of February 2022. Prosecutors asserted that under Jang’s leadership, Wemade engaged in the unauthorized sale of over $200 million in WEMIX tokens between February and October 2022. This occurred without adhering to the disclosure requirements mandated by South Korea’s Capital Markets Act. The company reportedly utilized these tokens for strategic investments in external funds and secured stablecoin loans, leveraging WEMIX as collateral. The accusations painted a picture of a significant breach of regulatory standards and a potential misuse of investor capital.
Adding further complexity to the situation was the December 2023 delisting of the WEMIX token by the Digital Asset eXchange Alliance, a prominent trade group comprised of South Korea’s leading cryptocurrency exchanges. This action was authorized by the Seoul Central District Court, following investigations into Wemade’s practices. The court’s decision underscored mounting concerns regarding transparency and compliance within the WEMIX ecosystem. The delisting served as a tangible consequence of the regulatory scrutiny and diminished investor confidence.
The controversy surrounding Jang and Wemade has deeply impacted investor sentiment towards the Wemade project. As of February 28, 2024, the WEMIX token’s trading price stood at $0.61, representing a drastic 97% decrease compared to its peak of $24.71 achieved on November 21, 2021. This substantial decline highlights the vulnerability of the token’s value and the ripple effect of the legal and regulatory challenges. Despite the favorable court verdict, prosecutors retain the option to appeal the ruling to a higher court if they believe the initial decision warrants reconsideration.
Beyond the core legal case, the WEMIX token’s trajectory was further complicated by a separate controversy involving allegations of a cover-up following a significant cryptocurrency hack. On February 28, over 8.6 million tokens were withdrawn due to an attack on the blockchain gaming platform’s Play Bridge Vault. The breach resulted in losses exceeding $6 million in cryptocurrency assets. Wemade disclosed information about the attack several days later, spurring accusations of a deliberate attempt to conceal the incident. However, Wemix Foundation CEO Kim Seok-hwan maintained that the delayed announcement was made to prevent market panic regarding the stolen assets. Despite Kim’s efforts to reassure investors, the token’s value declined by approximately 40% in the days following the disclosure.
