Wemade Wemix tokens flagged by Upbit, CEO says it's no problem

Wemade CEO Chang Hyun-guk answers questions from the local press during an online press conference held on Wednesday morning. [SCREEN CAPTURE]

Wemade's Wemix cryptocurrency received an "investment warning" from an exchange on Oct. 27.

Wemix "has been flagged with an Investment Warning by Digital Asset eXchange Association [DAXA],” according to Upbit, which urged investors to be cautious when buying the tokens.

There were differences between the number of tokens that were to be distributed according to disclosures and the actual number, according to DAXA.

Supply figures were inaccurate.

The company reported last January that it expects 245,966,797 Wemix tokens to be traded as of Oct. 31, but on Oct. 25, there were 318,421,502 Wemix tokens — a 72,454,705 difference. Wemix was traded at around 2,100 won ($1.5) on Wednesday.

It's just a paperwork problem, the company says.

According to WeMade, the difference occurred because the company failed to immediately report additional tokens to the market as it was planning to do so in a quarterly report scheduled for the end of the year.

In a press release on Oct. 30, the company promised faster updates of its token ownership and to regularly monitor whether the amount it has reported is different from the actual amount being circulated in the market.

The possibility of a delisting of the coins is "almost zero," insists Wemade CEO Chang Hyun-guk.

WeMade shares have lost about 85 percent of their value since hitting a peak in November 2021. Wemix coins have lost about 95 percent of their value over the same period.

The company lost 88.5 billion won on a net basis in the third quarter.

“We will strictly follow the rules that have been set up by the exchange. We are also looking to appoint a custodian company to heighten the level of trust. We are not considering Hyperithm. It is not a custodian company,” CEO.

Wemade has received 66 billion won from Microsoft, Shinhan Asset Management and Kiwoom Securities through convertible bonds, according to the company on Wednesday. It will spend half of that for marketing and development expenses this year and the rest next year, the company said.

“Despite Microsoft carrying out many different projects, blockchain games are not one of them,” Chang said. “But since we are seeking to build a blockchain ecosystem, we believe that there are many opportunities for cooperation and that a long-term partnership will be possible.”

The company aims to service 100 games using its Wemix blockchain system by the first quarter of next year.

Making high-quality games will be the key to changing people’s negative perspective toward blockchain games, namely Axie Infinity. The Vietnamese game has been criticized as a scam and leading people to quit their jobs to make money through the game amid the pandemic.

“North American people immediately think of play-to-earn [P2E] games when they hear blockchain games, and they think Axie Infinity when they hear P2E,” he said.

“This is due to a lack of understanding of how it works. If we prove that token economics can be suited well with the Western style of gaming, the trend will quickly change and Wemix will be the platform most ready.”

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