Wemix crypto collapse yields vague offer of compensation

Chang Hyun-guk, CEO of game publisher Wemade, explains the company's reasons for offloading its Wemix cryptocurrency during a YouTube livestream on Thursday. [SCREEN CAPTURE]

Wemade said that it will find ways to compensate investors in its Wemix cryptocurrency after the coin lost almost 70 percent of its value.

The company had been selling Wemix coins to finance investments.

In a YouTube livestream on Thursday, CEO Chang Hyun-guk said that Wemade had sold small amounts of the coin over a long period of time for investment purposes.

Wemade is best known for the Mir4 online game. It also operates the Wemix blockchain platform, which hosts a cryptocurrency of the same name.

Wemix token holders argue that Wemade has offloaded about 50 million coins, worth at least 160 billion won ($134.7 million).

The price of a Wemix token peaked at 29,490 won on Nov. 22, traded at 12,070 won on Dec. 31 and were changing hands at 9,000 won as of Thursday 4:30 p.m.

During a YouTube livestream on Wednesday evening, CEO Chang Hyun-guk said he will "look into ways" to compensate investors after angry remarks from viewers.

"Just as companies reward their investors through dividends after a successful year, we could do a similar thing," Chang said without elaborating.

Chang explained earlier on Wednesday that Wemade has been selling Wemix tokens to fund investments. He did not disclose the amount or the timeframe of the sales.

"There is no reason for us to cut the belly of Wemix, our golden-egg-laying goose," Chang said, answering questions as 8,600 viewers watched.

"Wemade owns 83 percent of all the Wemix tokens issued so far," he said. One billion Wemix tokens have been issued in total. "We have stated from the beginning that we are only going to offload 10 million tokens every month."

Wemade's selling has been compared to stock sales by Kakao Pay's top executives.

On Dec. 10, Kakao Pay CEO Ryu Young-joon and seven other executives sold 90 billion won worth of the company's shares a month of listing. The managers have been blasted by the union for selling their shares.

Chang said unlike selling by Kakao Pay executives, sales by Wemade were for the purpose of investment and that neither he nor other executives at the company own any Wemix tokens. To make sure that similar allegations do not arise in the future, the company will report all sales of Wemix.

"We are preparing a trading book for Wemix, which we should have done earlier," Chang said. "We will look for other ways to make our transactions clear."

The ultimate goal for Wemade is to establish a new blockchain-based game ecosystem using Wemix as the key currency, he said.

Wemade has been gaining attention from the gaming industry for Mir4, a play-to-earn (P2E) online game that has implemented non-fungible tokens (NFTs) in its gameplay.

Players of Mir4 can earn NFTs of game items and trade or sell them through the Wemix platform. The service is not available in Korea or China due to laws that prohibit the conversion of game tokens to real currency.

Five games developed by Wemade use the Wemix tokens as game platform and game currency. Wemade aims for 100 games by other companies to join the Wemix ecosystem by the end of the year, a spokesperson for the company said.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]