Wemade stocks plunge to daily bottom on delisting of Wemix coin

The Korea Times

The Korea Times

Finance

Sat, December 9, 2023 | 05:09

Companies

Wemade stocks plunge to daily bottom on delisting of Wemix coin

Posted : 2022-11-25 17:26

Updated : 2022-11-27 14:41

Wemade CEO Jang Hyun-kook, center, arrives at Wemade headquarters in Seongnam, Gyeonggi Province, Friday morning. Yonhap

Wemade to file for court injunction to rectify the issue

By Anna J. Park

It's been a real Black Friday for the stocks of gaming giant Wemade. With its Wemix cryptocurrency to be delisted from major coin exchanges, the stock prices of Wemade and its two subsidiaries, Wemade Max and Wemade Play, all listed on the tech-heavy Kosdaq market, plunged to rock bottom during Friday's session.

The stock price of Wemade finished at 39,400 won ($29.73), a 29.89 percent decrease, while Wemade Max fell to 13,000 won, a 29.92 percent fall, and Wemade Play nosedived to 15,100 won, a 29.93 percent fall. Local stock markets have an upper and lower 30 percent limit rule, which corrals listed stocks' daily price changes within 30 percent.

The three gaming stocks all nosedived to the floor during Friday's session, as major local coin exchanges announced Thursday their decision to delist Wemix ― the gaming giant's key cryptocurrency ― on Dec. 8 on the grounds of the cryptocurrency's false disclosure.

Digital Asset eXchange Association (DAXA), an alliance formed by the top five local crypto exchanges Upbit, Korbit, Coinone, Bithumb and Gopax, announced on Thursday evening their decisions to delist Wemix early next month.

They based the delisting on the fact that Wemix allegedly gave the coin exchanges a false disclosure on its coin circulation amount. Wemade claimed that it would circulate 245 million Wemix coins, while it actually distributed 314 million coins, which is 29.45 percent more than indicated in the disclosure information.

"The excess amount of coin circulation compared to its plan submitted to DAXA is a grave violation," DAXA said. "It is a rare situation so it is hard to win back trust on the cryptocurrency project, as we found many kinds of errors in their documents submitted during the grace period."

Since identifying the false information problem recently, DAXA members have been examining whether to delist or continue listing the coin, as they examined documents submitted by Wemade. But the coin exchange association said it found errors in the Wemade documents, which resulted in DAXA's further losing faith in the cryptocurrency project.

Wemade CEO Jang Hyun-kook speaks during an online press conference, Friday. Screenshot from YouTube.

Regarding the decision, Wemade said it would file for a court injunction to rectify the situation.

During an online press conference held on Friday morning, Wemade CEO Jang Hyun-kook said that DAXA's delisting decision was "very unfair."

"I think the delisting decision is an example of arbitrary power wielded by Upbit. I think this is very unfair, and they should've at least clarified how Wemade's submitted documents were insufficient to solve the issue," he said.

"The root of this problem came from the differences between the coin's circulation plan and actual circulated amount. Wemix submitted its circulation plan only to UpBit. When the coin was designated as a cautious investment by the cryptocurrency exchange, we asked them to provide specific definitions and guidelines for coin circulation. But they haven't given us any guidelines yet," Jang continued.

"Without having specific guidelines, they simply notified us they would delist Wemix, while they did not give us explanations in what standards Wemix failed to meet," he went on, stressing that the company's business will continue as planned, regardless of the current issue.

Wemix is a cryptocurrency issued by Wemix Foundation, a subsidiary of Wemade. It began circulation in October 2020, and is now listed on UpBit, Bithumb, Coinone and Korbit. The market cap of the coin stood at around 517 billion won as of Thursday evening, but it lost more than 60 percent of its value in just 20 minutes after DAXA's announcement of the delisting plan later in the evening.

annajpark@koreatimes.co.kr