Lawmaker's cryptocurrency scandal sparks war in local gaming industry

The Korea Times

The Korea Times

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Sun, October 1, 2023 | 12:13

Tech

Lawmaker's cryptocurrency scandal sparks war in local gaming industry

Posted : 2023-05-19 15:58

Updated : 2023-05-20 16:14

Wemade CEO Chang Hyun-guk speaks to lawmakers of the ruling People Power Party at the company's headquarters in Seongnam, Gyeonggi Province, Friday. Joint Press Corps

By Park Jae-hyuk

Independent lawmaker Kim Nam-kuk / Yonhap

Controversy over suspicious cryptocurrency trading by independent lawmaker Kim Nam-kuk, who left the main opposition Democratic Party of Korea after the scandal, has developed into a conflict between local gaming companies and professors specializing in the field, according to industry officials, Friday.

Their dispute erupted after the Korea Game Society published a statement on May 10, asking lawmakers to probe whether Wemade and other gaming firms have bribed politicians to legalize play-to-earn (P2E) games.

P2E games refer to those offering cryptocurrencies or non-fungible tokens to players in rewards for their plays. Wemade is the issuer of WeMix, one of various virtual assets in which Kim has invested.

Rep. Ha Tae-keung of the ruling People Power Party (PPP) also wrote on Facebook on May 12 that he had rejected requests from the gaming industry to legalize P2E games, during President Yoon Suk Yeol's presidential campaign.

"As Wemade tried to deliver a speech at a forum I hosted, I had to change the panel," Ha said. "I also canceled a meeting with industry officials, as Wemade wanted to attend."

In response, Wemade filed a criminal suit on Wednesday against Korea Game Society Chairman Wi Jong-hyun, a professor of Chung-Ang University's College of Business Administration. The company alleged the professor hurt its reputation by spreading false information.

"We are also considering filing a civil suit, in order to ask for compensation for significant damages to our shareholders and investors," the gaming firm said.

The Korea Association of Game Industry, which represents domestic gaming firms, also issued a statement that day threatening to take stern measures against Wi. The association urged him to stop defaming the local gaming industry.

Dongyang University's School of Game professor Kim Jung-tae, who belongs to the Korea Game Society, even claimed that the society had published its statement without getting approval from its members.

Korea Game Society Chairman Wi Jong-hyun delivers a speech during a forum hosted by the society in Yeouido in Seoul, Friday. Yonhap

The society, however, has maintained its stance, saying that a conglomerate's lawsuit against an academic society was unimaginable even under military regimes. It also hosted a forum on Friday, regarding the cause of the WeMix-led cryptocurrency scandal and possible countermeasures.

On the same day, a group of ruling party lawmakers visited Wemade's headquarters in Seongnam, Gyeonggi Province, to ask for CEO Chang Hyun-guk to respond to allegations against the company.

During the meeting, Chang said that he was unaware of Kim or his holding of Wemix at the time the lawmaker made suspicious transactions.

The ruling party lawmakers said that the Wemade CEO complained about Kim's refusal to disclose the history of his transactions. The lawmakers added that they are considering visiting Bithumb cryptocurrency exchange next week to look into Kim's transaction history.

pjh@koreatimes.co.kr