In the end, 'Relisting' for WEMIX was finalized…Court: "Suspected Deliberate Inaccurate Disclosure"

The delisting of the cryptocurrency WEMIX from domestic virtual asset exchanges has been finalized after its listing was removed twice.

The 50th Civil Division of the Seoul Central District Court (Chief Judge Kim Sang-hoon) dismissed Wemade's application for an injunction to suspend the delisting submitted against four exchanges affiliated with the Digital Asset eXchange Alliance (DAXA)—Bithumb, Coinone, Korbit, and GOPAX.

WEMIX is a cryptocurrency issued by a subsidiary of Korean game company Wemade targeting the blockchain gaming ecosystem.

DAXA, the alliance of five domestic won-based virtual asset exchanges (GOPAX, Bithumb, Upbit, Korbit, Coinone), decided to suspend trading support (delist) for WEMIX after designating it as an item of concern on the 2nd. On February 28, about ₩9 billion worth of WEMIX coins were stolen when a crypto wallet (Play Bridge Vault) was hacked. The incident was only disclosed on March 4, four days later. DAXA judged that the explanatory materials submitted by WEMIX did not resolve the reasons for the warning designation.

WEMIX was previously delisted from Korean exchanges by DAXA in December 2022 due to disclosure issues regarding circulation volume, but was relisted from February the following year. This is the first time in domestic blockchain history that a cryptocurrency has been delisted twice.

Wemade filed the injunction lawsuit on the 12th, claiming that DAXA made the delisting decision unilaterally without properly disclosing the process and basis.

The court did not accept Wemade's arguments. The court pointed out, "Although they notified overseas exchanges immediately after recognizing the hacking incident, they did not notify domestic exchanges and users without any special reason," adding, "It seems highly likely that they did not disclose due to concerns about a decline in the WEMIX coin price." Regarding the materials WEMIX submitted for explanation, the court said, "It is difficult to accept the reason for the four-day delay in disclosure."

The court also rebuked WEMIX for failing to sufficiently explain the circumstances of the hack, saying, "They only presented hypothetical scenarios for the cause of the incident and ultimately failed to clarify the cause." It added, "It is difficult to conclude that the domestic exchanges' decision that the reasons for designating WEMIX as an item of concern had not been resolved by the time of the trading support termination decision was wrong," explaining the reason for dismissal.

Trading of WEMIX on domestic won-based exchanges will be suspended from 3 a.m. on June 2, and withdrawal support will also end starting July 2.

WEMIX Foundation, a subsidiary of Wemade, stated, "We are very disappointed with the result of the injunction application, but we respect the court's judgment." The foundation added, "We will soon present plans for growing the WEMIX ecosystem in various ways. More than ever, we feel a heavy sense of responsibility and will do our best to resolve the situation, stabilize, and recover the ecosystem as soon as possible."

DAXA made a brief statement, "We respect the court's decision."

By Suwu Jang suwu@hankyung.com