Wemade Slapped With $12M Lawsuit Over WEMIX Token Dispute
Highlights
- Wemade sued for $12M by 28 ex-employees over unpaid WEMIX tokens.
- Dispute involves Wemade Tree, a subsidiary merged into Wemade in 2022.
- Wemade to address the lawsuit through legal channels amid broader regulatory challenges.
Wemade has been hit with a multimillion-dollar lawsuit from its own ranks. The dispute, centered around the distribution of the company’s cryptocurrency WEMIX. The case highlights the complex intersections of traditional business practices and emerging blockchain technologies.
Wemade Faces $12M Lawsuit
Wemade is facing a substantial lawsuit from a group of current and former executives and employees. The company announced on August 9 that 28 individuals filed a lawsuit on July 29 at the Seoul Central District Court, seeking damages of $11.85 million (16.18 billion won).
The plaintiffs, primarily former employees of Wemade Tree, a subsidiary that was merged into Wemade in February 2022, allege that the company failed to deliver on promises to pay them in WEMIX cryptocurrency.
The subsidiary was stablished in 2018, and it was key in the parent companies foray into blockchain technology. The subsidiary spearheaded the issuance of WEMIX tokens and their subsequent listing on cryptocurrency exchanges in 2020. In response to the lawsuit, they stated that they plan to respond according to legal procedures through our litigation attorney.” The company appears prepared to defend its position in court.
This legal challenge comes at a time when the cryptocurrency and blockchain sectors are facing increased scrutiny and regulatory challenges globally. The outcome of this case could have significant implications for how companies in the blockchain space manage employee compensation and token distribution.
Regulatory Challenges and Recent Indictment
This lawsuit emerges amid increasing global scrutiny of the cryptocurrency and blockchain sectors. Adding to Wemade’s legal troubles, South Korean prosecutors recently indicted the previous CEO Chang Hyun-guk. The charges against Chang, announced on August 5, allege that he fabricated and concealed information about Wemix token circulation, potentially misleading investors.
This indictment follows Chang’s February 2022 commitment to cease token sales and provide transparency on circulation data, highlighting the ongoing regulatory challenges faced by companies in the blockchain space.
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