Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Crypto gift to universities worthless after coin's delisting
The headquarters of Wemade, the operator of cryptocurrency Wemix, in Seongnam, Gyeonggi Province / Newsis
By Lee Yeon-woo
Seoul National University recently reported to the National Assembly that it would forgo cashing out about 1 billion won's ($720,149) worth of cryptocurrency it had received as a donation, following Wemix's delisting from Korean cryptocurrency exchanges.
According to Rep. Park Sang-hyuk from the ruling Democratic Party of Korea on Monday, Seoul National University Foundation stated that "there are no practical plans to cash out the assets" as Wemix's trading was effectively halted in Korea after its delisting.
In 2022, the Korean game company Wemade donated about 1 billion won's worth of Wemix, its proprietary coin, to major Korean universities, including Seoul National University, Korea University and Sogang University, as a promotional tool. The coins were locked for one year, allowing them to be cashed out starting the following year.
Wemade said the donation was "intended to encourage greater interest in the cryptocurrency sector."
The universities indicated they planned to use the donation to establish blockchain research centers and foster future talent.
In December 2022, Wemix was delisted from Korean cryptocurrency exchanges after being accused of false disclosure of its circulation value. It returned to the market in December 2023, but this May it became the first cryptocurrency in Korea to be delisted a second time.
As a result, universities that received Wemix donations have been unable to make any use of the funds.
Market watchers note that the confusion stems from the lack of discussion regarding donation procedures in the cryptocurrency industry. In 2022, it was not even possible for universities to open corporate accounts and liquidate the donated cryptocurrencies.
After the Financial Services Commission (FSC) introduced corporate account approvals and guidelines this February, the confusion was expected to subside.
The FSC's guidelines for nonprofit corporations requires the establishment of a control body, such as a pre-review committee, to oversee the acceptance and liquidation of virtual assets for donation or sponsorship purposes.
They also limit the types of virtual assets accepted based on factors such as liquidity and convertibility, and require the timing and method of sale to be predefined.
Seoul National University Foundation said that it has established internal control standards to prepare for the possibility of receiving donations from different sources in the future.
"The standards will adhere strictly to the decisions made by the FSC, and are currently under review. A final, detailed decision is expected by the end of the year," said an official from the foundation.
The National Assembly plans to review universities' future operational plans and the establishment of internal guidelines to prevent a recurrence.
"There may continue to be attempts to exploit a university's reputation as a means of boosting the value of virtual assets, as in the case of Wemix," Rep. Park told The Korea Times. "To prevent a second incident in which a donation becomes worthless, procedures for virtual asset donations by coin issuers and universities must be strengthened."