Wemade's coin is in trouble, and it's bringing down the company with it.
Wemix, Wemade's cryptocurrency, will be delisted, according to the Digital Asset eXchange Alliance (DAXA), a trade group representing five Korean exchanges, announced Thursday night.
Upbit, Bithumb, Coinone, Korbit, and Gopax will cease trading in Wemix coins on December 8 at 3 p.m. Owners will be able to withdraw their funds for a month following the end of trading.
Wemade CEO Chang Hyun-guk said in a tearful press conference that the decision was arbitrary and unfair, and that he would fight it in court.
"This is gapjil!" he exclaimed repeatedly during a Friday morning press conference, using the Korean word for abuse of power.
The decision comes a month after DAXA issued an Investment Warning to Wemix due to discrepancies between the number of tokens to be distributed according to company disclosures and the actual number outstanding.
The company said in January that it expected 245,966,797 Wemix tokens to be available on Oct. 31, but on Oct. 25, there were 318,421,502 Wemix tokens — a difference of 72,454,705.
Upbit gave statement by saying:
“There were numerous errors found in the files they handed in, and they repeatedly changed the content of the files even after submission. A rare situation has occurred where our level of trust in management capabilities has plummeted to a point where it cannot recover.”
Wemix fell from 2,200 won ($1.7) on Thursday to 800 won Friday morning, losing more than 95 percent of its value since November of last year.
During the same time period, the company's stock has also plummeted. It closed at 39,400 won on Friday, down 30 percent from the previous day and 85 percent from the same month last year, the daily trading limit.
In a press conference on Nov. 2, Wemade CEO Chang assured investors that the possibility of delisting is "almost zero."
The difference, according to Chang, occurred because the company failed to immediately report additional tokens to the market, as it planned to do in a quarterly report scheduled for the end of the year.
According to local news outlet Block Media, the comment had a negative impact on DAXA officials and resulted in Thursday's decision. Block Media was told by a DAXA official:
“Chang Hyuk-guk’s assurance that ‘Wemix will not be delisted’ had a negative effect.”
Chang insists that Wemade met all of DAXA's requirements, particularly Upbit's. He said in Friday's conference:
“We have fully provided with all the data that Upbit had asked for. Upbit never properly explained what its criteria are and just told us to ‘do what we can and see,’ without giving us detailed feedback of what’s missing and what’s not.”
Out of the five DAXA members, Upbit is the only Korean crypto exchange that has demanded Wemade submit its plans for how many coins it intends to distribute in the market. However, many coins are trading without submitting their planned amounts, according to Chang. He furiously added:
“If the plan is so important, then why is it not applying the same rules to other companies? If we are being penalized for submitting a plan and making changes along the way, then should we not have submitted anything at all, like the others? Why are we being punished for going the extra mile? Upbit is a private company but it’s also a trading platform for social assets. This gapjil and unfairness is social evil. I am not saying that we’ve done nothing wrong. I will take full responsibility for our faults as the decision-maker, but we ask that Upbit make its rules clearer.”
Wemade will file a lawsuit to have the decision overturned.