[Why&Next] WEMIX Suffers 8.7 Billion Hack Damage... Relisting 'Crisis'

Designation as a Trading Caution Due to Delayed Disclosure...
Delisting Decision Expected This Week
"Previously Delisted and Now Hacked"

The virtual asset WEMIX has suffered a large-scale hacking involving approximately 8.65 million tokens. While the WEMIX Foundation and others are working on measures to prevent recurrence and manage the situation, concerns about the termination of trading support (delisting) are emerging.

Wemix price trend over the past month. Source=CoinMarketCap

This is because the hacking incident occurred after WEMIX had already been delisted in 2022 and then relisted. Since the trading support best practice guidelines include provisions related to hacking, it is highly likely that DAXA (the virtual asset exchange collective council) will scrutinize the case carefully.

According to the virtual asset industry on the 18th, DAXA plans to either extend or lift the designation of WEMIX as a trading caution item or terminate its trading support by the 21st of this month. This is due to the delayed disclosure related to the WEMIX hacking incident.

The WEMIX Foundation announced on its homepage on the 4th of this month that approximately 8,654,860 WEMIX tokens (valued at about 8.76 billion KRW as of 9 a.m. that day) were irregularly withdrawn due to a malicious external attack on the Play Bridge Vault on the 28th of last month. This announcement came four days after recognizing the hacking damage. As a result, domestic exchanges such as Bithumb designated WEMIX as a trading caution item, citing that the exchanges had disclosed important information that could significantly affect users' reasonable investment decisions or the value of the virtual asset in an insincere manner.

The WEMIX Foundation explained that it did not intentionally conceal the hacking damage. Kim Seok-hwan, CEO of WEMIX PTE. LTD, said at a press conference held yesterday at Hancom Tower in Bundang-gu, Seongnam-si, Gyeonggi Province, "Since the infiltration case was not identified, we judged that the possibility of additional attacks remained," adding, "There was concern that immediate communication about the stolen assets could cause market instability and panic." He further stated, "There was absolutely no intention or attempt to conceal the incident."

However, virtual asset investors ultimately suffered twice due to WEMIX's delayed disclosure. According to the global virtual asset market data site CoinMarketCap, the price of one WEMIX token dropped from 1,012.17 KRW at 9 a.m. on the 28th of last month to 844.83 KRW at 3 p.m. on the same day. On the day of the disclosure, the price fell from 849.65 KRW at 3 a.m. to 591.44 KRW at 9 p.m.

In particular, since the hacking incident occurred, there is also a possibility of trading termination for WEMIX. Last July, DAXA established common guidelines for trading support reviews (listings) with domestic virtual asset exchanges and financial authorities. The guidelines include a clause stating, "If a significant amount of virtual assets has been stolen or hacked without authorization, and the cause of the theft has not been identified or resolved."

Additionally, concerns arise because WEMIX is a virtual asset that has already been delisted once and then relisted. In December 2022, WEMIX was delisted from the five major virtual asset exchanges due to discrepancies between the disclosed circulating supply and the actual circulating supply. Subsequently, in December 2023, it was relisted on virtual asset exchanges excluding Upbit, such as Bithumb, Coinone, Korbit, and GOPAX.

An industry insider said, "In the case of WEMIX, when it was listed before the guidelines were established, there were evaluations that it was a virtual asset with insufficient investor protection at that time," adding, "Since the incident has already occurred and similar cases may happen in the future, it could become a pilot case."