Court Dismisses Wemade's Injunction Request
"Significant Likelihood Disclosure Was Delayed Due to Concerns Over Coin Price Decline"
South Korean game company Wemade filed for an injunction to suspend the effectiveness of the trading support termination (delisting) of its cryptocurrency WEMIX, but the court dismissed the request. As a result, WEMIX will be delisted from domestic virtual asset exchanges starting at 3:00 p.m. on June 2.
On May 30, the 50th Civil Division of the Seoul Central District Court (Chief Judge Kim Sanghoon) dismissed Wemade's application for an injunction to suspend the effectiveness of the delisting decision against four exchanges?Bithumb, Coinone, Korbit, and GOPAX?that are members of the Digital Asset eXchange Alliance (DAXA).
The court explained the reason for dismissal, stating, "It is difficult to conclude that the domestic exchanges' judgment was wrong in determining that the reasons for designating WEMIX as an item of caution had not been resolved by the time the decision was made to terminate trading support." WEMIX is a cryptocurrency issued by Wemade through its subsidiary since 2020, targeting the blockchain gaming ecosystem.
Previously, on May 2, DAXA decided to delist WEMIX, which had been designated as an item of caution. The reason was that on February 28, WEMIX had 9 billion KRW worth of coins stolen due to a cryptocurrency wallet hacking incident, and the company only disclosed this fact after four days had passed.
Wemade argued, "DAXA made the delisting decision unilaterally without properly disclosing the discussion process or grounds," and filed for an injunction with the court.
However, as the court sided with the DAXA-affiliated exchanges, the secondary delisting of WEMIX has now been confirmed. The court stated, "It is difficult to understand why the disclosure of the hacking incident was delayed by four days," and added, "There is a significant likelihood that WEMIX did not disclose or notify the incident because it was concerned about the decline in the price of WEMIX coins."
The court also pointed out that Wemade failed to adequately explain the cause of the hacking incident. The court stated, "WEMIX has not properly identified the initial circumstances of the breach into the WEMIX coin system," and added, "They only presented hypothetical scenarios regarding the cause of the hacking incident and ultimately failed to clearly explain the cause of the incident."
Trading of WEMIX on domestic KRW-based exchanges will be suspended from 3:00 p.m. on June 2, and withdrawal support will end starting July 2. Previously, in December 2022, WEMIX was also delisted from domestic exchanges by DAXA due to issues with the disclosure of circulating supply.
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