A South Korean court has acquitted Jang Hyun-guk, former CEO of blockchain gaming company Wemade, of charges related to manipulating the circulation of the WEMIX cryptocurrency.
According to a report by local outlet News1 on Tuesday, the Seoul Southern District Court concluded that Jang had no intent to artificially influence crypto market prices through deceptive practices.
The verdict clears Jang of violating South Korea’s capital market laws, marking a notable legal victory for him. Jang now serves at blockchain gaming firm Nexus.
Prosecutors had accused him of falsely announcing a halt in WEMIX token liquidations to boost investor confidence and stabilize prices. However, the court ruled there was insufficient evidence to prove any intent to manipulate the market.
WEMIX Token Has Dropped 97% from Its All-Time High
On August 5, 2024, Jang Hyun-guk was indicted on charges of manipulating and concealing information regarding the actual circulating supply of WEMIX tokens. Authorities accused him of misleading investors by continuing undisclosed token sales, despite publicly pledging to halt such activity in February 2022.
Prosecutors alleged that under Jang’s leadership, Wemade unlawfully sold over $200 million worth of WEMIX tokens between February and October 2022. These sales were reportedly conducted without adhering to the disclosure obligations outlined in South Korea’s Capital Markets Act. The funds were allegedly used for external investments and to secure stablecoin loans, with WEMIX tokens pledged as collateral.
Amid the growing controversy, the Digital Asset eXchange Alliance—a consortium of South Korea’s major cryptocurrency exchanges—delisted the WEMIX token in December 2023, following approval from the Seoul Central District Court.
The scandal significantly eroded investor trust in the Wemade project. As of now, WEMIX trades at just $0.61, a steep 97% decline from its all-time high of $24.71, recorded on November 21, 2021.
Although Jang has been acquitted, prosecutors retain the option to appeal the decision to a higher court.
Wemix Foundation Accused of Cover-Up Following Hack Incident
In addition to the recent court case, the WEMIX token has been embroiled in a separate controversy involving allegations of a cover-up following a major security breach.
On February 28, hackers exploited the platform’s Play Bridge Vault, withdrawing over 8.6 million WEMIX tokens—resulting in losses exceeding $6 million.
The company disclosed the incident several days after it occurred, prompting accusations that it attempted to hide the breach.
Wemix Foundation CEO Kim Seok-hwan denied any intention to conceal the hack, stating that the announcement was delayed to prevent market panic due to the stolen assets.
Nevertheless, the delayed disclosure rattled investors, and the WEMIX token’s price plunged nearly 40% in the days following the attack.
