The South Korean game maker WeMade is under investigation by regulators for suspected “unregistered” sales on its WEMIX platforms.
The Financial Intelligence Unit (FIU) received a tip-off from the Digital Asset Exchange Association (DAXA) about WeMade’s WEMIX platform. DAXA is a group of registered domestic crypto exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax.
In December 2023, DAXA announced its collaboration with regulators to identify unregistered exchanges and sales channels. South Korean law requires all virtual asset service providers, including wallet providers, to obtain permits to operate in the country.
DAXA informed the FIU that WEMIX offers crypto wallet services without reporting its activities. The media reported suspicions that WEMIX is conducting undeclared business with its PLAY WALLET and PNIX DEX services.
What Crypto Services Does WeMade Platform Offer?
PLAY WALLET is a wallet that supports in-game currencies in the WEMIX ecosystem. It allows players to convert in-game currencies to WEMIX coins. The reports claim that gamers can indirectly trade their in-game currencies for fiat through major crypto exchanges.
The WEMIX DEX is a decentralized exchange that provides users with asset status information and price trends of digital assets. However, this service allegedly violates undeclared coin exchange rules.
WeMade in Regulatory Crosshairs?
WeMade has attracted significant interest from domestic investors despite having overseas subsidiaries. DAXA collects reports from the public and submits them to the FIU for review.
If the FIU rules against WeMade, there is a possibility that trading in WEMIX could be suspended. WeMade and its WEMIX token have had a mixed relationship with South Korean exchanges and DAXA in the past.
The Spanish crypto exchange Bit2Go recently listed WEMIX, as WeMade seeks wider overseas adoption for its coin.
WeMade disclosed net losses of $142.6 million for the fourth quarter of FY2023. The company began its crypto pivot several years ago by spinning off and reincorporating a dedicated blockchain gaming arm.
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