Korea cryptocurrency WEMIX to be delisted on court ruling

WEMIX, a South Korean cryptocurrency issued by WeMade Co., will be delisted on Thursday after a court ruled in favor of four local crypto exchanges’ decision not to support the trading of the coin, further dampening investor confidence in virtual currencies already drug down by the Terra debacle and the failure of Bahamas-based trading platform FTX.

A Seoul court on Wednesday denied an injunction request filed by WeMade, the pioneer of the country’s play-to-earn (P2E) game industry, to block the enforcement of a decision to delist the crypto by four domestic virtual currency trading platforms including the country’s top Upbit platform.

Investors will be unable to trade WEMIX on those exchanges – Upbit, Bithumb, Coinone and Korbit – from 3 p.m. on Dec. 8 local time. The holders of WEMIX must move their crypto to personal digital wallets or overseas exchanges.

The Digital Asset eXchange Alliance (DAXA), a trade group of local crypto exchanges, announced the decision on Nov. 24, saying it found WEMIX’s actual trading volume to be far below the planned transaction quantity.

WeMade argued a cryptocurrency’s trading volume is a concept with no clear criteria, saying the company has resolved the issue by retrieving all of the controversial WEMIX. The court dismissed WeMade’s claim.

“The decision may cause investor losses in the short term, but it is highly likely to secure market transparency and prevent future potential loss and risk by strictly restricting actions that violate the virtual asset ecosystem,” said the court in a statement.

CRISIS FOR BOTH THE CRYPTO MARKET AND THE MIR4 PUBLISHER

The delisting of WEMIX, the market capitalization of which had once topped 3 trillion won ($2.3 billion), is expected to magnify distrust in the entire virtual currency market, industry sources said.

WEMIX tumbled as much as 39.7% to 279.9 won on Bithumb in early morning trading on Thursday, extending its losses to 87.9% since Nov. 24. Shares of WeMade also lost up to 24.1% to 28,600 won on the day, far underperforming the 1% fall of the country’s tech-heavy Kosdaq.

The delisting is also predicted to hurt WEMIX’s ecosystem. WeMade, the publisher of the global-hit massive multiplayer online role-playing game (MMORP) Mir4, has been utilizing the crypto for various projects such as P2E games and non-fungible tokens (NFTs).

WeMade has tried to alleviate investors’ concerns, saying the business through WEMIX has already been shifted to the global market. But as some 90% of WEMIX has been trading in South Korea, investors remained worried.

The company plans to sue to resume WEMIX trading on those local exchanges. It has already filed a petition with the country’s antitrust regulator over the DAXA’s decision, saying those exchanges colluded in the delisting process. 

It is also expected to seek an overseas crypto exchange listing.

Write to Seung-Woo Lee and Hyun-Ah Oh at leeswoo@hankyung.com
Jongwoo Cheon edited this article.