– South Korean game maker WeMade crypto project under probe for “unregistered” sales on WEMIX platforms
– Financial Intelligence Unit (FIU) conducting investigation
– Tip-off provided by Digital Asset Exchange Association (DAXA)
– South Korean law stipulates all virtual asset service providers (VASPs) must obtain permits
– WEMIX platform accused of offering crypto “wallet services” without reporting activities
– WeMade and WEMIX coin attracting significant interest from domestic investors
– WEMIX DEX accused of violating “undeclared coin exchange” rules
– South Korea’s financial regulators to implement Virtual Asset User Protection Act and Virtual Asset Industry Supervision Regulations on July 19
– Speculation that trading in WEMIX could be suspended if FIU rules against WeMade
– WeMade and WEMIX token have had a mixed relationship with South Korean exchanges and DAXA
– Spanish crypto exchange Bit2Go listed WEMIX on its platform this week
– WeMade disclosed net losses of $142.6 million for the fourth quarter of FY2023
Section 1: Regulators Investigate WeMade Crypto Project
On February 8, 2024, South Korean regulators launched a probe into suspected “unregistered” sales on WeMade’s WEMIX platforms. The Financial Intelligence Unit (FIU) received a tip-off about WeMade’s WEMIX platform from the Digital Asset Exchange Association (DAXA)’s Joint Advisory Group, leading to the investigation.
Section 2: Violation of Regulatory Requirements
The WEMIX platform is suspected of offering crypto “wallet services” without reporting its activities, violating South Korean law which stipulates that all virtual asset service providers (VASPs) must obtain permits to operate in the nation. WeMade’s PLAY WALLET and PNIX DEX services are reportedly involved in conducting undeclared business with potentially undeclared coin exchange rules.
Section 3: Potential Impact on WEMIX Trading
In the event that FIU rules against WeMade, there is a possibility that trading in WEMIX could be suspended. WeMade has also had a mixed relationship with South Korean exchanges and DAXA, with its coin being delisted by DAXA members in December 2022, and subsequently listed or relisted by some members.
Section 4: Global Adoption of WEMIX Token
WeMade is looking for wider overseas adoption for its coin, as the Spanish crypto exchange Bit2Go listed WEMIX on its platform this week. The firm disclosed net losses of $142.6 million for the fourth quarter of FY2023, indicating the potential impact of the regulatory investigation on its business.
Section 5: Background and Context
The WeMade crypto pivot began around half a decade ago when the firm first spun off and reincorporated a dedicated blockchain gaming arm. This regulatory investigation coincides with South Korea’s impending implementation of the Virtual Asset User Protection Act and the Virtual Asset Industry Supervision Regulations, which will impose stricter punishments for crypto trading offenses.
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