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| Wemade headquarters in Seongnam, Gyeonggi Province / Yonhap |
By Anna J. Park
Amid growing controversies, financial authorities have decided to closely look into the case of a scheduled delisting of Wemix, a key cryptocurrency project by game company Wemade, to see whether the coin exchanges' listing and delisting criteria need to be more transparent or improved.
According to the Financial Supervisory Service (FSS) on Sunday, it has begun monitoring the situation, as it examines local cryptocurrency exchanges' internal rules about stipulating digital assets' delisting process.
The examination, however, will not exert any binding influence on the Wemix delisting case, as the FSS does not have any legal grounds to supervise the digital asset markets, due to a lack of relevant laws regulating local cryptocurrency assets. The FSS said the monitoring aims to figure out any institutional loophole in the digital asset markets, which would later help the financial authorities' possible future regulation of the cryptocurrency asset markets.
"The FSS cannot intervene in this particular delisting case, because it does not have any legal rights to do so. The financial authority is aiming to look into the matter from an institutional perspective to figure out how to bring out an improvement in this situation, as both sides' positions are starkly conflicting with each other," an official from the FSS said.
Currently, there are no legislative enactments regarding digital assets in Korea, although several bills are pending at the National Assembly for further deliberation. Without having a law on it, major local cryptocurrency exchanges have formed an association where they voluntarily impose regulations, when necessary. The top five local coin exchanges ― Upbit, Korbit, Coinone, Bithumb and Gopax ― created the Digital Asset eXchange Association (DAXA) in June this year.
In October, DAXA came up with joint guidelines concerning the listing of cryptocurrencies. Since then, DAXA has been voluntarily deciding the listing and delisting of coin assets, without having prior consultations with the financial authorities.
Wemade strongly refutes that the coin exchanges have been unfair in their decision to delist Wemix, from early December, on the grounds of false disclosure of the circulating amount of the coin.
Wemade asserted that it submitted its coin circulation plan only to Upbit out of the many crypto exchanges available, and the coin exchange failed to respond to Wemade's request to provide specific standards and guidelines defining a coin's circulation amount. The game company also raised the issue of fairness compared with other cryptocurrencies.
"There are numerous coins listed and traded at UpBit at this point, which haven't yet revealed their coin circulation plans. This unfair practice cannot be tolerated anymore," Wemade CEO Jang Hyun-kook said during an online press conference on Friday, following DAXA's announcement on Thursday evening regarding their decision to delist Wemix from their exchanges early next month.
Wemade said it will file for a court injunction against the coin exchanges, while it also plans to bring the case to the Fair Trade Commission.
DAXA announced last Thursday to delist Wemix on Dec. 8 from their exchanges, as the coin project committed a false disclosure in that it violated its circulation plan by circulating nearly 30 percent more from its disclosure information. DAXA called it a grave violation, saying it found further errors in documents submitted by Wemade during a grace period during the past month.
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