A South Korean court acquitted Jang Hyun-guk, the former CEO of blockchain gaming firm Wemade, of manipulating the WEMIX crypto token’s circulation.

On Tuesday, local news outlet News1 reported that the Seoul Southern District Court ruled Jang did not intend to influence crypto market prices using deceptive means. 

This ruling cleared him of violating the country’s capital market laws, marking a significant legal win for Jang, who now works at blockchain gaming company Nexus. 

Prosecutors alleged that Jang had falsely announced a halt in liquidation for WEMIX tokens to stabilize prices and induce investor confidence in the asset. However, the court found no clear evidence of intent to manipulate the market. 

WEMIX token down 97% since its peak

On Aug. 5, 2024, Jang was indicted on charges of fabricating and omitting information about the actual circulating supply of WEMIX tokens. He was accused of deceiving consumers and failing to disclose token sales, despite promising to stop selling tokens in February 2022. 

Prosecutors claimed that under Jang’s leadership, Wemade unfairly sold over $200 million in WEMIX tokens in the market from February to October 2022, without complying with the disclosure requirements of South Korea’s Capital Markets Act. The company allegedly used the tokens to invest in external funds and receive stablecoin loans, using Wemix as collateral. 

In response to the controversies, the Digital Asset eXchange Alliance, a trade group comprised of South Korea’s largest exchanges, delisted the WEMIX token in December 2023, after the Seoul Central District Court approved the move. 

The controversy involving Jang has hurt investor confidence in the Wemade project. The WEMIX token now trades at $0.61, a 97% decrease from its all-time high of $24.71 on Nov. 21, 2021.

Despite the verdict, prosecutors can file an appeal to a higher court if they disagree with the ruling. 

Coinpectra reached out to Wemade for comment but had not received a response before publication. 

Related: Bank of Korea to take ‘cautious approach’ to Bitcoin reserve

Wemix Foundation accused of cover-up amid hack

Apart from the court case, the WEMIX token has faced another controversy, involving allegations of a cover-up after a major crypto hack.  

On Feb. 28, over 8.6 million tokens were withdrawn because of an attack on the blockchain gaming platform’s Play Bridge Vault.

The hack resulted in more than $6 million in crypto losses. The company disclosed information days later, leading to allegations of a cover-up. 

However, Wemix Foundation CEO Kim Seok-hwan said the company had no intention of concealing the attack. He said the announcement was delayed to avoid causing panic in the market because of the stolen assets. 

Despite Kim’s attempt to calm the markets, the token’s price plummeted almost 40% days after the attack. 

Magazine: Can Off the Grid survive Steam’s crypto ban? Rage over Maplestory cheaters