Wemade investigated for alleged evasion of reporting obligation: Report
Wemade, a South Korean Web3 game developer with a market capitalization of 1.6 trillion won ($1.2 billion), is being investigated by local prosecutors, according to Korean news reports.
Investigations are focused on allegations that the company made unfair profits by potentially avoiding regulations requiring virtual asset service providers to register with authorities. reported thursday.
Korean regulations mandate Registration and reporting by cryptocurrency service platform. This excludes platforms that do not share control of their users’ assets by providing private keys. Wemade (Wemade) started out as a game developer but switched to issuing its own tokens.
Wemix
-3.14%
) and blockchain mainnet argued that the company was not subject to reporting requirements.
It is reported that the prosecution is investigating whether PNIX, a Wemade-affiliated decentralized exchange, and Play Wallet, a digital asset storage system, withhold private keys from users. According to Culture, the purpose of the investigation is to determine whether PNIX and Play Wallet Services are violating the order by avoiding reporting obligations required of platforms that do not provide users with private keys.
Culture reported that the Financial Intelligence Unit (FIU), the domestic financial sector regulator, also received a similar report and began an investigation into Wemade.
Wemade Wemix Team responded An official announcement from Asia on Thursday afternoon stated that PNIX DEX and Play Wallet services are not subject to compliance requirements.
The statement said Play Wallet is a decentralized service where the team has no control over users’ private keys or assets. The team added that PNIX only provides a decentralized trading platform that processes buy and sell orders, where assets waiting to be traded are stored in smart contracts out of the operator’s hands.
The statement did not explicitly specify whether either service provided private keys to users.
The Rock requested additional opinions from Wemade and the prosecution.
Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.
