Wemade, Unexpected Large-Scale WEMIX Sell-Off...Investor Trust 'Shaken'

Wemade's Stock Shakes on Large WEMIX Sell-off News... Down 8.84% on the 11th
Unclear WEMIX Holdings by Wemade Raise Concerns of Repetition

[Asia Economy Reporter Gong Byung-sun] Game company Wemade is facing investor dissatisfaction after selling a large amount of its self-issued cryptocurrency ‘Wemix’ without prior notice. Wemade stated that this decision was made for the development of the Wemix ecosystem.

On the 11th, Wemade closed the market at 138,100 KRW, down 8.84% (13,400 KRW) from the previous day. The decline has further expanded, dropping 22.37% just this month. Wemix is also showing increased volatility. According to the domestic cryptocurrency exchange Bithumb, Wemix plunged 18.56% on the 10th but surged 31.43% the previous day after being listed on the domestic cryptocurrency exchange Upbit.

The volatility of Wemade and Wemix is due to the news of Wemade’s large-scale sale of Wemix. Wemade acknowledged that it disposed of part of its Wemix holdings but has not disclosed the specific scale or timing of the disposal. Industry insiders estimate that 50 million units were sold, generating 200 to 300 billion KRW, but Wemade denied this claim.

Wemade maintains that there is no problem with the large-scale sale of Wemix. It had already stated in its whitepaper that it would sell Wemix to use the proceeds for investment, and the funds secured this time will be used for the development of the Wemix ecosystem. According to the Wemix whitepaper, Wemade plans to issue a total of 1 billion Wemix tokens, of which 74% will be used to support long-term growth.

However, investors are expressing dissatisfaction. They criticize the act of dumping tokens into the cryptocurrency market without any prior notice as irresponsible and difficult to trust. This criticism parallels the backlash against Ryu Young-jun, the appointed CEO of Kakao, who sold Kakao Pay’s treasury shares just one month after listing. Furthermore, Wemade’s current Wemix holdings are unclear, and if such actions are repeated, it is expected that the value of Wemix will inevitably be damaged.

There are also criticisms regarding the limitations of the cryptocurrency market, which lacks clear regulations. Cryptocurrency companies can pre-disclose purchases or sales of issued cryptocurrencies on disclosure platforms like Xangle, but it is not mandatory. Cryptocurrency issuers are actively exploiting this loophole, as there is no obligation to disclose transactions or holdings.

Hong Ki-hoon, a professor of business administration at Hongik University, said, “Legally, there is no problem, but ultimately it is an ethical issue,” and expressed concern that “similar incidents may be repeated as many game companies enter the cryptocurrency market.”