Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Cyworld criticized for disrupting cryptocurrency market
By Park Jae-hyuk
CyClub price plunges after social media site delays reopening again
By Park Jae-hyuk
Another delay of Cyworld's reopening has alarmed investors who took a chance on CyClub, a cryptocurrency issued by Cyworld Z, the new operator of the social media platform that had been popular in the 2000s. Cyworld Z has been planning to revive the site after acquiring it earlier this year from its previous owner that halted its operation in 2019 due to financial difficulties.
On Monday, Cyworld Z announced abruptly it would postpone the reopening to Aug. 2. The announcement came just two and a half hours before the planned reopening at 6 p.m. that day.
Some investors are even questioning this new announcement, claiming it could be an empty promise intended only to manipulate CyClub's price.
Right after the announcement, CyClub's price on Bithumb cryptocurrency exchange plummeted 11 percent within a half hour, to 32.7 won ($0.03) from 37.7 won.
Cyworld Z cited multiple but unconfirmed cyberattack attempts originating from China and other countries as the core factor behind its abrupt decision. The company claimed it detected 30 cyberattacks on Sunday and an additional 80 attacks on Monday morning.
“We prevented all cyberattacks from other countries, but we decided to resume the service after upgrading our security system to avoid any possible leakage of personal information,” Cyworld Z said in a press release.
Cyworld's reopening has been delayed several times already this year, arousing concerns among CyClub investors.
Its operator initially promised to reopen the site in March, but the plan was then postponed to May and later to July. Regarding the repeated delays, Cyworld Z said it needed significantly more time than expected to restore user data.
Most CyClub investors are expecting a hike in the cryptocurrency's price with Cyworld regaining its popularity as before.
Cyworld had a major influence on the country's internet community back in the early 2000s, posting about 100 billion won in annual sales and hosting about 32 million users in its prime. But its desktop-focused user interface failed to impress and the rise of mobile-friendly overseas platforms such as Facebook and Twitter put the service in serious danger. Cyworld Z aims to regain its popularity by moving forward with crypto-focused strategies.
After taking over the platform, Cyworld Z partnered with MCI Foundation for the creation of a cryptocurrency named MCI. The virtual asset was rebranded as CyClub in April and it has been traded on Bithumb exchange. Its price went up to 94.57 won in April.
Cyworld Z has denied suspicions about market manipulation, asking users to pay more attention to its forthcoming Metaverse platform than its cryptocurrency business.
However, Cyworld Z is still facing doubts as its governance structure has been shrouded in secrecy. The company has refused to disclose the names of three of its shareholders, revealing only two Kosdaq-listed firms ― Sky E&M and Intromedic.
In addition, this is not the first time that Cyworld's cryptocurrency business has alarmed investors.
Before the shutdown of its service in 2019, Cyworld's previous owner launched a cryptocurrency named Clink. Clink was once traded on several cryptocurrency exchanges such as ProBit, BitSonic and CoinZest, but the exchanges delisted the crypto after its price fell. Clink disappeared from the market completely after Cyworld was sold to its current owner.