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News

WEMIX Scandal Escalates: South Korean Authorities Seize 2 Companies Involved

August 4, 2023 - Around 2 mins mins to read

Key Points:

  • South Korean prosecutors seized two companies linked to the alleged counterfeit circulation of virtual asset WEMIX by game company WeMade.
  • Accusations involve large-scale WEMIX sales without user disclosure.
  • Probe highlights regulatory challenges in the virtual asset sector amid concerns about fraud.
According to Digital Asset, South Korea’s Seoul Southern District Prosecutor’s Office has taken action against two companies on August 3 and 4 as part of an ongoing investigation into the alleged counterfeit circulation of virtual asset WEMIX.
WEMIX Scandal Escalates: South Korean Authorities Seize 2 Companies Involved

WeMade, a listed game company, is at the center of the probe. The companies implicated in the large-scale liquidation of WEMIX have not been officially disclosed.

The Prosecutor’s Office is looking into accusations that WeMade sold substantial amounts of WEMIX through these companies, potentially without proper user disclosure.

This follows a previous search and seizure operation involving WeMade and its CEO Jang Hyun-Duk, on June 30, indicating a significant escalation in the investigation.

The companies under scrutiny are Company A, affiliated with Algorith Capital, a virtual asset management firm with an office in Seoul’s Gangnam-daero, and another virtual asset investment company in Jung-gu, Seoul.

Notably, Algorith Capital’s Korean corporation is not a government-registered virtual asset manager.

WeMade’s alleged large-scale liquidation of WEMIX between November 2020 and January 2022 without informing users and subsequent use of funds for mergers and acquisitions raised concerns. The controversy underscored the necessity of effective virtual asset regulation.

According to the previous report, South Korean authorities have initiated a full mandatory investigation into the market maker of WeMade.

The search and seizure were carried out in response to a complaint filed with prosecutors on May 12 by WEMIX investors, who accused the firm of fraud, embezzlement, and breach of trust.

The investigation’s scope broadened due to a complaint by WEMIX investors, accusing WeMade of fraud, embezzlement, and breach of trust. The case highlights the ongoing challenges associated with ensuring transparency and accountability in the virtual asset sector.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Algorith Capital

Jang Hyun-Duk

South Korean

Wemade

WEMIX

Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.