Wemade VS Upbit 'Day of Destiny'... Who Will Smile?

[Asia Economy Reporter Kang Nahum] The fateful day has arrived for Wemade, the issuer of WEMIX, and Upbit, which leads the Digital Asset Exchange Joint Council (DAXA). Wemade is awaiting the result of the provisional injunction it filed against DAXA to halt WEMIX trading (delisting), while Upbit is awaiting the verdict in the self-trading trial involving its Chairman Song Chi-hyung and executives. Although these appear to be separate cases at first glance, there are expectations that the verdict on Chairman Song could also influence the ruling on WEMIX.

Wemade on Edge Over Chairman Song Chi-hyung’s Verdict

According to the legal community on the 7th, the results of the provisional injunction to suspend the delisting of WEMIX and the second trial verdict for Song Chi-hyung, chairman of Dunamu which operates Upbit, are scheduled for that afternoon. Chairman Song’s verdict is expected around 2:30 PM, with the WEMIX delisting injunction decision coming later.

Wemade is particularly attentive to the outcome of Chairman Song’s second trial. They believe that the acceptance or rejection of the WEMIX delisting injunction will hinge on whether Chairman Song is found guilty or not.

The charges against Chairman Song involve violations of the Act on the Aggravated Punishment of Specific Economic Crimes (fraud). Song, along with Dunamu’s CFO Nam and Quant Team Leader Kim, allegedly arbitrarily created member ID accounts between September and November 2017, deposited assets worth 122.1 billion KRW through these accounts, and engaged in trading using an automated order program to simulate actual member sell orders. The prosecution claims they induced members to trade through false transactions and gained unfair profits amounting to approximately 149.177 billion KRW.

The prosecution indicted them without detention in December 2018, and in the first trial in December 2020, requested a 7-year prison sentence and a 1 billion KRW fine for Chairman Song, but the court acquitted him.

If the second trial reverses the verdict and Chairman Song is found guilty, Upbit’s justification for delisting WEMIX on grounds of ‘investor protection’ and ‘transparency’ could weaken. An industry insider commented, "If the head of the exchange cannot clear the self-trading charges, it is questionable whether they can claim to protect investors or maintain transparency in exchange operations."

Future Prospects Depending on Acceptance or Rejection of WEMIX Delisting Injunction

Separately from Chairman Song’s verdict, if the WEMIX delisting injunction is dismissed, the delisting will proceed as scheduled on the 8th. Investors will need to transfer their WEMIX holdings to personal wallets or overseas exchanges immediately after delisting.

This process is expected to cause further decline in WEMIX’s price, as investors may choose to liquidate by selling. Wemade is expected to promptly file a civil lawsuit against DAXA if the injunction is dismissed.

Even if the injunction is accepted, litigation between the parties is inevitable. During the injunction hearing on the 2nd, Upbit’s legal team revealed additional reasons for delisting and expressed willingness to engage in a legal battle with Wemade. The lawyers stated, "WEMIX is operated by Wemade, a KOSDAQ-listed company. Our investigation uncovered several serious acts involving employees that were previously unknown. This is a very serious matter, and we will organize more evidence and facts to submit to the court."

Another official from a DAXA-affiliated exchange said, "If the injunction is accepted, the exchanges under DAXA will discuss future response plans and prepare for litigation. Since counter-lawsuits are expected, this could lead to an intense legal battle."

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