Wemix "Notice Delay Due to Panic Sell Concerns... No Intent to Conceal"

WEMIX Foundation Holds Emergency Press Conference at Hancom Tower on the 17th in Pangyo
"Explains Reasons for Delay in Disclosure of Hacking Incident and Announces Plans to Prevent Recurrence"

Wemade's blockchain subsidiary, WEMIX Foundation, emphasized that there was "absolutely no intention or attempt to conceal" regarding criticisms that the announcement about the hacking timing of the virtual asset WEMIX was delayed.

Kim Seok-hwan, CEO of WEMIX Foundation, is seen apologizing at an emergency meeting regarding the WEMIX cryptocurrency hacking damage held on the 17th at the Hancom Tower auditorium in Bundang-gu, Seongnam-si, Gyeonggi-do. Photo by Yoo Hyun-seok

Kim Seok-hwan, CEO of WEMIX Foundation (WEMIX PTE. LTD), held a press conference on the 17th at the Hancom Tower auditorium in Bundang-gu, Seongnam-si, Gyeonggi Province, stating, "The announcement was delayed due to concerns about additional attacks or panic selling."

On the 4th of this month, WEMIX Foundation announced on its homepage that approximately 8,654,860 WEMIX coins were abnormally withdrawn due to a malicious external attack on the Play Bridge Vault on the 28th of last month. The announcement was made four days after recognizing the hacking damage. 'Play Bridge' is a system that transfers WEMIX to other blockchain networks. The 'Vault' is the wallet that stores WEMIX during this process.

Due to the hacking, 8,654,860 WEMIX coins were transferred to two hacker wallets and then moved to seven overseas virtual asset exchanges. Most of these coins were sold. The amount of stolen WEMIX coins was valued at 1,011 KRW per coin based on CoinMarketCap at the time, totaling approximately 8.75 billion KRW.

According to WEMIX, an unidentified attacker stole the authentication key for the service monitoring system of the non-fungible token (NFT) platform 'Nile' and infiltrated the system. On the day of the incident, the attacker arbitrarily generated abnormal transactions and attempted 15 withdrawals. Two attempts failed, but 13 succeeded.

At the briefing, CEO Kim repeatedly bowed his head and apologized to WEMIX investors. However, he emphasized that the delay in the announcement was not to conceal the incident but a decision made for the market and investors.

He said, "Since the infiltration case was not identified, we judged that the possibility of additional attacks was still present," adding, "If we communicated immediately about the stolen assets, there were concerns about panic phenomena due to market instability."

He continued, "I made the decision regarding the announcement, and if it was wrong, I will take responsibility," emphasizing, "We will improve the communication process to provide faster and more transparent information."

WEMIX believes this hacking incident was carried out by a professional hacker. He said, "Around July 2023, a worker stored data in a public repository for development convenience," adding, "Although not 100% certain, the leakage of this data is identified as the cause of the incident." He further added, "It appears to be the work of a professional hacker."

Kim Seok-hwan, CEO of WEMIX Foundation, explaining the WEMIX hacking incident at Hancom Tower in Pangyo on the 17th. Photo by Yoo Hyun-seok

Regarding the hacking response, CEO Kim explained, "After recognizing the hacking damage on the 28th of last month, we shut down the problematic server," and "We then tracked the asset flow of the attacker, froze the assets at the relevant exchanges, and filed a complaint with the Cyber Investigation Unit of the Seoul Metropolitan Police Agency."

CEO Kim emphasized that they will pursue the attacker to the end and hold them accountable. He said, "We will chase the attacker to the end, identify them, and hold them responsible," adding, "Whether the involved party is an insider or outsider, we will take action and handle the results transparently."

Along with this, a full-scale security reconstruction has begun. First, all authentication logic was replaced to prevent infiltration through the same route. They are also working on migrating infrastructure and require additional approval if suspicious transactions occur.

Additionally, a buyback of their own coins is underway to alleviate market impact and restore trust, thereby enhancing WEMIX's value. Previously, the WEMIX Foundation announced two rounds of buybacks on the 13th and 14th, totaling 10 billion KRW and an additional purchase of 20 million WEMIX coins. He said, "We expect meaningful results in stabilizing the ecosystem and enhancing WEMIX's value through market purchase methods."

From the left, Kim Seok-hwan, CEO of WEMIX Foundation, and Ahn Yong-woon, Chief Technology Officer (CTO) of Wemade, are explaining measures against the WEMIX hacking damage at Hancom Tower in Pangyo on the 17th. Photo by Yoo Hyun-seok

He explained that they are currently providing explanations regarding the designation of WEMIX as a cautionary item on domestic virtual asset exchanges. He said, "We are currently explaining to the Digital Asset Exchange Association (DAXA)," adding, "It is difficult to speak in detail, but we are doing our best."

Anyong-woon, the newly recruited Chief Technology Officer (CTO) from Bithumb, recently joined Wemade and explained, "Hacking issues are ongoing problems in the virtual asset industry," adding, "If security and internal policies at the exchange level are properly established, recurrence can be prevented."

CEO Kim also emphasized, "We will thoroughly prepare and respond to ensure that such incidents never happen again," adding, "The foundation and Wemade's commitment to the growth of the WEMIX ecosystem remains unchanged, and we will turn this incident into an opportunity to work even harder."