Wemade Responds to WEMIX Designation as a Cautionary Stock with "Disclosure System Improvement"

Wemix Excess Circulation Issue Arises, Real-Time Circulation Disclosure System Established
"We Will Do Our Best to Quickly Lift the Designated Caution Status"

[Asia Economy Reporter Kang Nahum] Wemade has explained that the issue of excess circulation of the cryptocurrency WEMIX, which has been designated as an investment caution stock, arose due to the expansion and operation of the WEMIX ecosystem. Wemade acknowledged that its disclosures regarding circulation volume were insufficient and decided to establish a system for real-time disclosure.

On the 31st, Wemade announced that it plans to entrust the foundation-held WEMIX tokens to a trusted third-party custody company. Going forward, Wemade will update the expected circulation volume of WEMIX shared with exchanges, regularly review it, and if changes to the plan are necessary, explain the reasons and the changed volume in advance to establish a disclosure system that allows real-time tracking of WEMIX circulation volume.

Jang Hyun-guk, CEO of Wemade, is being interviewed on the 3rd at Wemade headquarters in Seongnam, Gyeonggi Province. / Seongnam = Photo by Kang Jin-hyung aymsdream@

All actions that increase the circulating supply in the market will also be disclosed before execution or immediately after contract signing. Additionally, Wemade will ensure timeliness by issuing ad hoc notices alongside the existing quarterly reports. A Wemade official said, "We apologize for the increased worries and anxiety among WEMIX holders," and added, "We will do our best to promptly lift the investment caution designation."

On the 27th, domestic cryptocurrency exchanges including Upbit, Bithumb, Coinone, and Korbit, members of the Digital Asset Exchange Association (DAXA), designated WEMIX as an investment caution stock due to discrepancies between expected and actual circulation volumes and the lack of clear disclosure of trading circulation volume. WEMIX, which was trading around 2,500 KRW, plunged sharply after the designation and is currently trading around 1,800 KRW.

According to Wemade, the reasons for the discrepancy between the expected and actual circulation volumes of WEMIX are that ▲ liquidity pool supply for mainnet services (25 million tokens), ▲ deposits for borrowing (35.8 million tokens), and ▲ ecosystem expansion and operation (11.65 million tokens) were not included in the actual circulation volume. Wemade explained, "According to the expected circulation volume submitted to exchanges in January this year, the expected circulation volume of WEMIX by the end of this month is 245.97 million tokens," and "As of the 25th of this month, the actual circulation volume is 318.42 million tokens, resulting in a difference of 72.45 million tokens."

Wemade explained that since January, instead of liquidating WEMIX in the market, it has been securing funds through direct investment in WEMIX, collateral loans, and block deal sales to invest in the ecosystem. Accordingly, on the 11th and 14th, Wemade transferred 64 million tokens from the reserve wallet in two transactions, of which 35.8 million tokens were deposited in the DeFi protocol Cocoa Finance. The remaining 27 million tokens are stored in cold wallets, which Wemade clarified are not included in the circulation volume.

In other words, the 35.8 million tokens deposited are not circulating in the market but are held as deposits, and the company manages them with 24-hour monitoring to prevent collateral liquidation. Additionally, 11.65 million tokens were used for mainnet swap pool supply and borrowing, which were utilized for marketing and investments in ecosystem partners.

Regarding criticism about the lack of clear disclosure of trading circulation volume, Wemade explained, "Since the deposited tokens are not circulating in the market, we judged that they should not be included in the circulation volume calculation and did not recognize the difference with the expected circulation volume." At the same time, Wemade acknowledged, "There are cases where some time lag occurs due to quarterly reporting, and explanations for token movements visible in wallets were not provided immediately."

This content was produced with the assistance of AI translation services.