Wemade's native token, wemix, will be delisted from top South Korean exchanges next month, despite assurances from the gaming company about the way it has distributed the token.
Members of the Digital Asset Exchange Alliance (DAXA) — a group made up of South Korean crypto exchanges Upbeat, Bithumb, Coinone, Korbit and Gopax — will take wemix off their books on Dec. 8, a little over a month since they issued an investment warning against the token.
DAXA is concerned the wemix team distributed far more tokens than it stated in a plan submitted to members, according to a notice posted on Upbit's website. It also accused the company of providing insufficient or misleading information to investors.
DAXA initially gave the wemix team a period starting from the issuance of the warning on Oct. 27 to rectify the situation and address concerns, which the company pledged to do by clarifying information and improving its reporting systems.
Even with nearly a month to work things out, the two sides have seemingly failed to come to an understanding. DAXA said it still found errors in the data submitted during this period.
An 'unreasonable' decision
The wemix team slammed the decision as "unreasonable" shortly after its release. It claims the foundation that manages the wemix supply has not circulated a single token more than it has officially announced, and never circulated or sold wemix without prior disclosure.
"Their decision suggests that errors of the past are deemed irrevocable and are the main cause for termination of transaction support. The wemix team strongly believes this to be the result of an irrational approach in resolving the situation," it said in a statement.
The decision is a blow to an established company trying to carve out a new business in web3. While Wemade has been making games since the early 2000s, including the Legend of Mir series, it's only started to explore blockchain technology recently. In October, it launched a stablecoin and its wemix mainnet.
To help with its web3 project, the company also raised a funding round in November, securing $46 million from Microsoft's investment arm M2 and South Korean firms Shinhan Asset Management and Kiwoom Securities. It's the third blockchain-related company that Microsoft has invested in.
As for the wemix token, which it considers "the very essence and the heart of our platform-driven and service-oriented mega-ecosystem," the repercussions of the DAXA announcement have been swift. Its value has dropped almost 70% since the announcement to around $0.49.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.