Ex-Wemade CEO indicted for fabricating Wemix token data

South Korean prosecutors have charged former Wemade CEO Chang Hyun-guk with allegedly falsifying and concealing information regarding the circulation of Wemix tokens.

Korean prosecutors have indicted Chang Hyun-guk, former CEO of gaming company Wemade, on charges of fabricating and concealing information regarding the circulation of Wemix tokens linked to the company.

The indictment, unsealed on Monday, August 5, accuses the former Wemade CEO of deceiving investors by failing to disclose significant sales of Wemix tokens, despite his promise in February 2022 to halt sales and provide transparency regarding circulation data, Korea JoongAng Daily reported.

The legal action comes nearly a year after Wemix investors first took the matter to court in May 2023. The Korean gaming giant, which was founded in 2000, first began issuing Wemix tokens in 2020 to support its play-to-win video games. The company reportedly sold 108 million tokens between November 2020 and November 2021, netting around ₩290 billion (over $210 million). The report notes that the company later pledged to stop further token sales and disclose circulation data.

Wemade continues to sell tokens

However, Korean prosecutors allege that Wemade continued to sell Wemix tokens worth 300 billion won without meeting disclosure requirements between February and October 2022. The report also suspects the company used these tokens to invest in external funds and obtain loans using Wemix as collateral.

As a result of these actions, Wemix was delisted by the Digital Asset Exchange Alliance, which consists of the five largest crypto exchanges in Korea, due to regulatory concerns. However, the token was relisted after Wemade announced that it was no longer selling the token on the market. Chang Hyun-guk, who stepped down as CEO in March, remains as Wemade’s vice chairman.