Wemade WEMIX Delisted from 5 Major Exchanges... Dream of Key Currency Fades

Jang Hyun-guk, CEO of Wemade, is being interviewed on the 3rd at Wemade headquarters in Seongnam, Gyeonggi Province. / Seongnam = Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporters Kang Nahum and Lee Myunghwan] The cryptocurrency WEMIX, issued by Wemade, will be delisted (trading support terminated) from the five major domestic cryptocurrency exchanges. As the first among domestic game companies to enter the blockchain business and lead the P2E (play-to-earn) gaming market, this delisting decision has put related businesses on hold. Wemade CEO Jang Hyun-guk's goal of making WEMIX the base currency has also become more distant.

WEMIX ‘Expelled’ from 5 Major Exchanges... Why?

According to industry sources on the 25th, the Digital Asset Exchange Association (DAXA), composed of Upbit, Bithumb, Coinone, Korbit, and Gopax, held a meeting the previous day and decided to terminate trading support for WEMIX. Accordingly, from 3 p.m. on the 8th of next month, WEMIX will no longer be tradable on these exchanges.

DAXA explained the reason for terminating WEMIX trading support as follows: "The circulating volume exceeded the distribution plan submitted to DAXA member companies to a significant degree, which was judged to be serious." They added, "Various errors were found in the materials submitted during the explanation period, and multiple corrections or revisions occurred regarding important information such as circulating volume after submission." DAXA further assessed WEMIX as being in an ‘exceptional situation’ where it is difficult to restore trust in the project’s ability to identify and manage critical internal information.

Some analysts suggest that government and ruling party regulatory moves toward domestic exchanges played a role in DAXA’s decision. Following the bankruptcy of FTX, which caused a major shock domestically, the ruling People Power Party agreed that market order must be established through legislation on virtual assets. Seong Il-jong, chairman of the People Power Party’s Policy Committee, stated, "We must first prepare investor protection measures and carefully review the distribution system and vulnerabilities in exchange operations considering global standards to legislate accordingly."

Kim So-young, Vice Chairman of the Financial Services Commission, also emphasized, "As revealed in the recent FTX incident, it is necessary to establish regulatory measures against unfair trading, including obligations for virtual asset operators to protect user assets and restrictions on self-issued coins."

CEO Jang’s previously asserted ‘too big to fail’ logic appears to have backfired as a ‘contempt of court’ offense. After WEMIX was designated as a cautionary item, Jang repeatedly emphasized in various interviews that "delisting will not happen." DAXA indirectly criticized Jang, stating, "It was confirmed that incorrect information was provided to investors, and unverified information regarding the termination of trading support by DAXA was repeatedly announced through the media, causing confusion."

Wemade’s Blockchain Business Faces Setbacks

Wemade is facing a comprehensive crisis. With the delisting, WEMIX’s credibility has declined, making it difficult to onboard 100 games onto the WEMIX platform as planned. As of last month, a total of 17 games have been onboarded to WEMIX Play, and contracts for onboarding 43 games have been signed. With a long way to go to reach 100 onboarded games, the release of the scheduled games has become uncertain. Among them, the Anipang series by Wemade Play, which was scheduled to be released and onboarded next month, was already accepting pre-registrations.

What Wemade is most concerned about is the decline in WEMIX’s value. The price of WEMIX, which was trading in the 2,200 KRW range on various exchanges, plunged sharply immediately after DAXA’s announcement of trading termination and was trading in the low 600 KRW range as of 9:30 a.m. that day.

The price of cryptocurrency is the key to the success of P2E games. If the price falls, the value of items also decreases, which could lead to the collapse of the in-game economic system. Wemade’s goal of making WEMIX the ‘base currency’ of the P2E gaming world is inevitably becoming more distant. A Wemade official stated, "We are preparing to file an injunction against the termination of WEMIX trading support. We will work to correct this with each individual exchange."

In the stock market, Wemade’s stock price plunged to the lower limit. It started at 39,400 KRW, down 29.89% (16,800 KRW) from the previous trading day, and did not recover from the lower limit. As of 10 a.m., one hour after the market opened, about 2 million shares remained at the lower limit.

In the securities industry, the delisting decision was assessed as placing Wemade’s blockchain business in a critical crisis. Lim Hee-seok, a researcher at Mirae Asset Securities, said, "The uncertainty regarding the WEMIX platform is inevitably increasing due to this delisting, and the burden on game companies considering onboarding will increase, slowing the platform’s expansion." Mirae Asset Securities downgraded Wemade’s investment opinion from ‘Buy’ to ‘Neutral’ and lowered the target price from 70,000 KRW to 51,000 KRW on the same day.