WEMIX loses delisting battle in court against South Korean exchanges but promises to continue the fight

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Microsoft-backed game developer Wemade has pledged to continue the fight against a coalition of South Korean digital asset exchanges following the delisting of its native token, WEMIX.

On December 7, the Seoul Central District Court sided with the decision of the Digital Asset Exchange Alliance (DAXA) to delist the token from leading South Korean exchanges. DAXA represents the biggest exchanges in South Korea, including Bithumb, Upbit, Coinone, and Korbit.

DAXA told the court that the reason for delisting the WEMIX tokens was Wemade’s failure to disclose the number of outstanding tokens, which would assist customers in carrying out due diligence. The court agreed with their argument, noting that transparency is necessary for the nascent industry facing a slew of black swan events.

“Crypto assets have no regulator or an absolute means of determining their price like the stock market,” noted the court. “Therefore, the distribution number is crucial because the price is decided as a result of the balance between supply and demand.”

Since the announcement of the delisting process, WEMIX’s price has been on a steady descent, and the court’s decision saw the asset tumble by 60% in under 24 hours. Currently, the asset is trading at $0.27, having lost 90% in the last 30 days.

Upbit and Bithumb will allow clients to withdraw their WEMIX tokens until January 7, 2023, while Coinone’s customers have until December 22, 2022, to transfer their tokens to another platform. The delisting does not affect international exchanges like KuCoin or Gate.io, providing an alternative for affected investors.

Not going down without a fight

Wemade has stated that it will challenge the court’s decision to side with exchanges, saying, “we will continue to make efforts to prove the injustice of DAXA’s decision.”

The firm revealed that it would file a suit against the body and send a complaint to the Korea Fair Trade Commission (KFTC), citing anti-competition law violation. Wemade had previously filed a petition for a preliminary injunction against the delisting move but was overruled by the courts.

South Korea’s Financial Supervisory Service (FSS) noted that it is closely monitoring proceedings before flexing its regulatory muscles.

“If the DAXA says it has decided in accordance with fair internal and external standards, I think it would be necessary for us to look into whether those standards were fair or not,” said Lee Bok-hyun, head of the FSS.

Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets