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Wemade’s WEMIX Token To Be Delisted After Court Rejects Injunction

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WEMIX, the native token of South Korean video game developer, Wemade was delisted by the nation’s four crypto exchanges on the grounds of inaccurate reporting of circulation data.

Bithumb, Upbeat, Coinone, Korbit, and Gopax — which are part of the Digital Asset Exchange Alliance [DAXA] announced on Nov. 24 that they would end the support for WEMIX on Dec. 8.

A few months prior, the group issued an investment warning that there was considerably more WEMIX in circulation than disclosed, and Wemade had agreed to work with DAXA to alleviate these concerns.

However, the situation worsened when Wemade CEO Henry Chang, speaking at an online press conference on November 25, criticized Upbit for misusing its authority by delisting WEMIX and threatened to report the exchanges to the Fair Trade Commission.

The online game publisher refused to back down and ultimately filed an injunction request in a bid to prevent other exchanges from delisting its token.

As reported by Money Today News, South Korea’s Seoul Central District Court has now dismissed the firm’s suggestion after the hearing on Dec. 2.

This implies that the four exchanges will remove the token from their platform at 3 p.m. on 8th Dec.

WEMIX Token Drop By 50%

As word of the delisting decision spread, WEMIX Communication issued a statement stating it had sincerely followed DAXA’s requests and concerns and fixed a number of problems where they felt the group’s circulating supply had been overestimated, adding:

“The team does not acknowledge or agree with the unreasonable decision made by the Digital Asset eXchange Alliance (DAXA)… It is crucial to note that the Foundation has not circulated a single WEMIX more than what we have officially disclosed thus far.”

The price of WEMIX plummeted following the news, and at the time of writing is down by over 47% with a current price of $0.35.

Meanwhile, Binance has come to the gaming firm’s aid as its legal issues have gotten worse. Wemade’s token will be kept under institutional custody by Binance Custody, the largest cryptocurrency exchange in the world.

It will manage the asset and verify its circulation volume from next week, as per Wemade Co. Ltd. Moreover, 70% of WEMIX’s total supply, which contributes to 92% of the cryptocurrency that is not in circulation, will be overseen by Binance Custody. 

Here’s Why These Terra Case Witnesses Are About To Face Prison-Time

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Kim Seo-Joon, a significant witness called to testify in the Terra parliamentary inquiry, did not appear, citing “extreme stress,” according to the local South Korean news outlet Korea Economic Daily. Seo-Joon is the CEO of the venture capital firm Hashed and a pioneering investor in Terra (LUNC, formerly LUNA). Seo-Joon stated “extreme stress” as a justification for missing the investigation.

According to the news report, Seo-Joon is one of the six individuals chosen to take part in the Terra collapse investigation by the South Korean parliament. The South Korean government is attempting to comprehend what transpired to cause the LUNA and UST currencies to lose $40 billion.

To explain his absence, Seo-Joon wrote a letter to the national assembly. He claimed that he had a significant mental collapse after the sudden demise of LUNC (formerly LUNA) and the de-pegging of its related algorithmic stablecoin TerraClassicUSD (USTC). He declared,

“I have been suffering from anxiety disorder and panic disorder due to extreme mental stress.”

Seo-Joon also sent a professional evaluation and a medical certificate confirming that he had been hospitalized since July 29 and was undergoing therapy from a psychiatrist along with his letter. Seo-Joon is “in desperate need of emotional stability at this moment,” in the professional’s opinion, and it was claimed that both medicine and counseling treatment made his anxiousness worse.

Seo-Joon claimed that Hashed had lost $3.6 billion from its peak value in late April in an interview with Bloomberg in August. The company held 30 million LUNC (at the time, LUNA) tokens.

Fate Of The Other Witness In Terra Case

Seo-Joon is not the first witness to cancel on the investigation. On October 6, the parliamentary session was also missed by Lee Jung-hoon, the chairman of the South Korean exchange Bithumb. According to Jung-hoon, his panic issue prevented him from attending the investigation. And if that weren’t enough, Jung-hoon is currently facing a maximum sentence of 8 years in jail for a $70 million scam.

Other witnesses who have provided testimony throughout the Terra investigation include Kang Jong-hyun, a significant Bithumb shareholder, CEO of Dunamu, the organisation that runs UpBit, South Korea’s largest cryptocurrency exchange, Lee Seok-woo, Chai Holdco Director Shin Hyun-sung, and Terraform Labs Co-Founder Daniel Shin.

Do Kwon, the chief of Terra, is not on the assembly’s list of people to question. However, international law enforcement agencies keep looking for the now-famous creator.

Terra: Do Kwon’s Associate Listed As A Witness Before Audit Committee

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Terra’s co-founder and developer Daniel Shin along with representatives of the digital asset industry would bear witness before South Korea’s financial audit committee in the upcoming annual state audit, local sources reported.

According to reports, witnesses for a three-week parliamentary audit beginning on October 4 will include Tchai Holdco general manager Shin Hyun-Seung, DSRV Labs CEO Kim Ji-Yoon, Bithumb Chairman Lee Jeong-hoon, and Dunamu CEO Lee Sirgoo.

“We are internally assessing how to prepare”, an industry official told the newspaper.

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Terra: Do Kwon's Associate Listed As A Witness Before Audit Committee 2

Kwon and Shin founded Terraform Labs in 2018 with the goal of competing with PayPal and other industry giants. Later that year, the two raised $32 million, and in 2019, an ICO raised $62 million.

In March 2020, Shin took a step back from his ownership of Terraform Labs and resigned as CEO in order to focus on his other venture Chai. Do Kwon, the other co-founder, then assumed leadership of the company.

According to a Bloomberg article quoting local media, after Terra’s fallout, Shin’s home in Seoul was searched for potential illicit behavior. Investigators reportedly also went to the Chai office, a mobile payment app Shin founded in 2019.

The raids were a part of the investigation on claims that Kwon purposefully brought TerraUSD to its demise.

In order to estimate the extent of investor losses, a team of South Korean detectives also went to the offices of seven local cryptocurrency exchanges, including Upbit, Bithumb, and Coinone, and seized transaction records and other data.

Terra’s “Wanted Man” Deny Rumours Of Cashing Out

Shin’s colleague and partner Do Kwon is currently a wanted man by Interpol who allegedly tried to transfer several millions worth of BTC across exchanges. Upon discovery, prosecutors have frozen transactions on the suspicion of money laundering and concealment. 

After a South Korean court issued an arrest order for Do Kwon, he denied attempting to pay out the millions of dollars worth of Bitcoin. Kwon criticized media organizations for disseminating “misinformation” about him in a recent tweet.

Kwon and five other Terraform Labs affiliates are charged with breaking the country’s capital markets law by South Korean authorities. Kwon is also accused of other offenses that the prosecution has not yet made public.

Terra co-founder’s home raided by S.Korean prosecutors

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While the Terra collapse has stirred confusion in the Crypto world, South Korean officials are determined to probe fraud charges of the same.

According to a story in the Korean media, authorities on Wednesday conducted a raid at the Seoul residence of Daniel Shin, the co-founder of Terraform Lab.

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Terra co-founders Daniel Shin and Do Kwon

Additionally it was stated that the raid was carried out as part of a larger inquiry into claims that fraud was to blame for the collapse of the stablecoin.

In May, the stablecoin abruptly deviated from its peg to the US dollar, triggering a cascade that affected the whole industry and led to the overexposure of a number of hedge funds and exchanges. A complaint was made against the founding company and co-founder Do Kwon in the same month by several investors in the South Korean-based Luna (LUNA) cryptocurrency, accusing them of fraud and breaking regional securities rules.

Terra’s collapse caused havoc in the lives of its employees

Prosecutors imposed a travel ban on a large number of the firm’s associates, including former employees, in June. The office did not identify the individuals subject to the one-month travel ban, although they may include current and former employees as well as developers. In order to protect their ongoing investigation, prosecutors declined to offer more information.

Furthermore, the collapse of TerraUSD and Luna, according to research by the Bank of Korea, South Korea’s central bank, was a major reason why the global currency market shrank by more than 40% from late last year when its market value had risen to almost $2.3 trillion. The recent increase in the U.S. Federal Reserve’s benchmark interest rate to combat inflation has also aided in the decline by driving away investors from risky assets, according to the bank.

According to Yonhap News Agency, authorities looking into a fraud case related to the downfall of algorithmic stablecoin also conducted raids, earlier this week, at seven cryptocurrency exchanges in South Korea.

According to the report, eight private residences and business locations were searched along with Bithumb, Upbit, Coinone, and four other local exchanges.

In order to determine if the founder of the Labs, Do Kwon, is responsible for purposefully causing the collapse of UST and LUNA, investigators are currently grabbing evidence from the raids.

Entities That Caused Terra Collapse Were Raided by South Korean Prosecutors

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Following the collapse of Terra, further investigative actions were taken by the South Korean authorities. Seven bitcoin exchanges were among the 15 companies that South Korean authorities investigating Terraform Labs searched and seized.

The offices of Upbit, Bithumb, Coinone, Korbit, and Gopax, as well as other companies connected to the collapse of Terra, were raided by the Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutors Office, according to a report published on Wednesday by News1 Korea.

Authorities allegedly collected information on TerraUSD (formerly UST) and LUNA transactions, which resulted in losses for almost 200,000 Korean investors after the tokens’ significant price devaluation and subsequent collapse in May.

Few Terra victims appointed local law firms

Some of the victims of Terra’s collapse and UST’s de-pegging apparently hired local law firm L.K.B. & Partners to represent them in a lawsuit against LUNA and its co-founder Do Kwon on the grounds that the business committed fraud.

More than 100 people who allegedly incurred losses totaling more than $8 million filed complaints with the prosecutor’s office.

According to a representative for L.K.B & Partners, “The defendants did not adequately notify about design faults and deficiencies in the algorithm when building and releasing Luna in a conspiracy to attract investors.”

The bankruptcy of Do Kwon’s firm and the events that followed it, despite the company’s headquarters being in South Korea, significantly affected the cryptocurrency sector.

Investors impacted by the UST and LUNA fiasco in the United States hinted at taking legal action against yield generating program Stablegains for allegedly misappropriating $44 million in deposited cash.

Another Stablecoin Bites The Dust? MIM Project “Nearly Insolvent”

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Magic Internet Money [MIM] is a stablecoin soft-pegged to the US dollar and minted by the money lending platform Abracadabra. Owing to the current market upheaval that has capsized the stablecoin projects, the asset is too on the verge of near insolvency.

Market observer Autism Capital released a series of tweets detailing what went wrong. First, during the Terra fallout, the protocol behind MIM- Abracadabra created a bad debt of $12 million to cover the protocol’s MIM liabilities.

Abracadabra reportedly took down their analytics dashboard to “upgrade” it which Autism Capital found odd.

The analyst then accused the MIM core team of failing to pay back the bad debt out of the MIM treasury and resorting to buying CRV instead. The price of CRV has been in a downward spiral and there is no way to check the bad debt trapped in the protocol with the dashboard down, it alleged.

We’re concerned that the protocol could become insolvent, either through the MIM treasury continuing to dump in value or more bad debt created. At that point, the rational thing to do for any MIM holder is to dump it, as the last person holding the bag would get nothing back.

MIM is not the latest stablecoin to de-peg in the ongoing crypto crash. As reported by TronWeekly, TRON [TRX] and WAVES algorithmic stablecoins projects- USDD and USDN too lost their peg.

Stablecoins’ Future Looks Bleak?

Looking at the rate at which these assets class are mired with near insolvency, it is uncertain what lies ahead for those projects. To add to that, recently Dogecoin’s co-founder Billy Marcus made a controversial statement that 95% of the cryptocurrency projects are scams.

Through his Twitter handle, Billy Markus, co-founder of DOGE said, “the reason why people think crypto is 95% scams and garbage and most crypto people are assholes is that crypto is 95% scams and garbage and most crypto people are assholes.”

Adding, “Let’s change that. it starts with you – what you support, and how you behave.”

Elon Musk, a well-known DOGE advocate replied back with a laughing emoji. Following the crypto crash, Doge has fallen by over 65% in less than 2 months.

Korea’s Crypto Exchanges Are Planning to Form a New Emergency System

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Korea’s major crypto exchanges have agreed to develop a new emergency system that will activate within 24 hours if another Terra-style crash threatens to occur.

Exchanges will gather under the new method to respond to sudden unfavorable market consequences, such as what happened with Terra in May.

According to a source from local news outlet Daily Sports, the agreement came after five of the country’s top crypto exchanges, Upbit, Bithumb, Coinone, Korbit, and Gopax, attended a session at the National Assembly, South Korea’s legislature, on Monday to discuss market fairness.

Korea’s new system to tackle a Terra-style fall

Exchange officials, members of the National Assembly, and Chairman Lee Bok-Hyeon of the Financial Supervisory Services (FSS) addressed components of a new code of conduct that exchanges will voluntarily follow to protect investors.

In September, the new code will also see the launch of a warning system to alert investors of especially high-risk virtual assets due to extraordinary price changes or other unusual activities.

Listing standards will be revisited in October, and a regular evaluation system for all listed tokens will be implemented.

The collapse of the Terra ecosystem in May resulted in tens of billions of dollars in losses and a flurry of legal issues for Do Kwon, the company’s creator, who was confirmed to have cheated the government out of roughly $40 million in taxes.

Do Kwon, the South Korean founder and CEO of Terraform Labs, has been the center of attention for Korea’s exchanges. The notorious Financial and Securities Crime Investigation Team, often known as the Grim Reapers of Yeoui-do, has been investigating Kwon for alleged wrongdoing and tax evasion.

According to The JoongAng news outlet, the Grim Reapers unearthed records from the Seoul tax office on Wednesday, claiming and confirming that Kwon and Terraform Labs dodged roughly $40 million in corporation and income taxes in 2021.

Luna Foundation Guard Funds Were Requested to Be Frozen by the South Korean Police

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Police in South Korea has sent warnings to cryptocurrency exchanges, requesting the freezing of funds linked to the Luna Foundation Guard.

On Monday, Korean authorities sent a request to the country’s largest cryptocurrency exchanges, urging that funds not be transferred. The Luna Foundation Guard was specifically asked by the Seoul Metropolitan Police Agency not to take any action. Authorities claim they have acquired evidence linking the group to embezzlement.

The Luna/Terra algorithmic stablecoin debacle earlier this month devastated investor portfolios overnight, with the coin’s value plummeting by nearly 99 percent. This request, on the other hand, is neither a demand nor legally enforceable. Each individual can choose how they wish to answer, but no one knows how they will react.

Luna Foundation Guard might be in trouble

Several large Korean investors have investigated and sued Do Kwon, the CEO of Terraform Labs, following the collapse of the TerraUSD (UST) stablecoin. As a result of this, the “Grim Reaper,” a Korean Financial and Securities Crime Joint Investigation Team, was revived.

Korean lawmakers have met with executives from Upbit, Bithumb, Coinone, Korbit, and Gopax, among other sites. Because the leaders of these exchanges are not obligated to comply, this meeting is most likely a ploy to put pressure on them.

“We will review the exchange’s investor safety procedures,” Yoon Chang-Hyeon, chairman of the People’s Strength Virtual Assets Special Committee, wrote on Facebook, according to Newspim.

According to the publication, it is reasonable to assume that exchange representatives will be held accountable in some way for the losses suffered by investors as a result of the Terra (LUNA) price drop. The Korean National Assembly, according to Newspim, is making moves to limit punishment in this sector.

Coinone has suspended LUNA trading as of May 11th, and Binance has also suspended certain spot trading.

The request to crypto exchanges and the Do Kwon probe are unrelated, despite the fact that this official report is part of a broader story.

Litecoin’s Confidential Transactions Lead to Warnings by Korean Exchanges

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The latest privacy-focused MimbleWimble upgrade to the Litecoin (LTC) blockchain has prompted two of Korea’s leading crypto exchanges to issue investment warnings about the fifth-largest cryptocurrency.

On Monday, Bithumb and Upbit, which together account for the majority of South Korean trading volume, released statements cautioning investors about the risks of the privacy-enhancing upgrade.

Litecoin’s adoption of the privacy-focused technology Mimblewimble, according to Bithumb, allows users to do “secret transactions,” which allow them to send tokens while masking transaction data. Upbit also made a similar statement.

Korea’s Act on the Reporting and Use of Specific Financial Transaction Information, which requires cryptocurrency exchanges to undertake to Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, was mentioned by the two exchanges.

Exchanges issue warning against Litecoin investors

Korean exchanges have a history of delisting cryptocurrencies after providing similar warnings. The other two major South Korean exchanges, Korbit and Coinone, have yet to make any announcements.

The MimbleWimble update concept was first proposed nearly two and a half years ago. The new upgrade was released earlier this year after a majority of nodes authorized the MimbleWimble (MWEB) version. It will be able to interface with new MWEB privacy features. It was completed at Litecoin’s 2 million block height.

The MimbleWimble Litecoin upgrade has been the most eagerly anticipated in the history of cryptocurrencies. MWEB provides LTC users with not only additional privacy features, but also significant blockchain performance improvements. On the Litecoin blockchain, MWEB removes superfluous transaction data from blocks, allowing for more discrete transactions.

In 2011, Litecoin was launched as one of the first Bitcoin competitors (BTC). According to CoinMarketCap, it has a market cap of more than $5 billion, making it the 18th most valuable cryptocurrency.

Crypto Remained the Most Important Aspect of Korea’s Presidential Election

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In Korea’s presidential election, contenders fought tooth and nail to gain the support of uncertain young voters. Both candidates went to great pains to make their campaigns nasty.

According to statistics, over 40% of Koreans aged 20 to 30 possess crypto assets, and overall crypto trading volume exceeds the KOSPI stock exchange.

The prohibition on initial coin offerings (ICOs), which was enacted in 2017, was the first focus of both candidates. Both candidates were aware of the dangers and provided potential remedies.

Candidate Lee Jae-Myung stated that ICOs would be allowed if sufficient safety precautions were implemented but did not specify what those safeguards were.

On the other hand, now-president Yoon Suk-yeol proposed using bank-backed crypto exchanges to convert ICOs to IEOs.

Candidates showered crypto support to lure Korea’s youth

Yoon issued his own NFTs a week before the elections after obtaining an advantage by detailing how he’d manage ICOs. Yoon said that he would release a total of 22,329 NFTs at a price of around $40 each.

His opponent, taken off guard, proclaimed right away that he’d be raising airdropped NFTs as well, but he couldn’t match Yoon’s impact.

Yoon Suk-yeol won by less than 1% on March 9th, bringing the campaign to a close. Both candidates used crypto ideologies to appeal to the younger generation, assuming that the old guard had already settled on a candidate and would not alter their minds.

However, a week before the elections, the research found that adults in their 40s and 50s in South Korea had a significant quantity of cryptocurrency assets.

Upbit and Bithumb, the region’s two largest crypto exchanges, provided the figures. According to average data, the 40-50 age bracket accounted for approximately 52 percent of total users on both platforms.

The data shows the 2018 crypto boom among 20 and 30-year-olds, while the present main participants are 40 and 50-year-olds with significant financial power and stock exchange expertise.

Both candidates’ doctrines may have appealed to a considerably more significant number than they thought, making the election’s outcome even more important.