Wemade Ex-CEO Cleared in WEMIX Market Manipulation Case, Token Plummets 97%

The former CEO of Wemade has been cleared of charges related to market manipulation in the WEMIX token case. The Seoul Southern District Court concluded that there was insufficient evidence to prove that the ex-CEO had intended to manipulate the market. This ruling ends a 12-month legal battle that has had significant implications for the crypto industry in South Korea and globally.

The WEMIX blockchain coin, central to the controversy, has experienced a dramatic depreciation of 97% since the scandal broke. Its current price stands at 0.61, a stark contrast to its peak of 24.71 in late 2021. This price crash has heightened investor anxiety, especially as South Korean exchanges have delisted the token.

Prosecutors had accused Wemade of inflating the circulating supply of tokens and failing to disclose the sale of over $200 million in tokens between February and October 2022. The charges also included allegations that the executive falsely promised to halt token sales to bolster the price of WEMIX and retain investors, despite internal decisions to continue selling.

However, the court ruled that there was a lack of concrete evidence to prove the intention of market manipulation. This ruling highlights the regulatory challenges and the difficulties in enforcing the Capital Markets Act in South Korea's volatile crypto environment.

Despite being cleared of criminal liability, Wemade and its executives face significant fallout. The Digital Asset eXchange Alliance (DAXA), which represents leading exchanges in the country, voted to delist WEMIX following court approval due to concerns over transparency and investor safety. This action reduced market liquidity and accelerated the token's decline.

The WEMIX Foundation struggled to manage investor reactions post-verdict. Concerns over disclosure protocols and a significant hack of a key blockchain platform exacerbated the situation. In February, a security breach cost the foundation $6 million, which was not publicly disclosed until days later, leading to a 40% additional price decline and renewed suspicions of a cover-up.

The court's decision underscores the need for stronger crypto regulations. It serves as evidence of the current rules' inadequacy in addressing the complexity and technicalities of crypto market malfeasance. The collapse of WEMIX is a stark reminder to digital asset investors that market trust hinges on governance, transparency, and effective regulation as economies worldwide adjust to the crypto landscape.