WeMade Accused Of Fraud In The Latest Investigation Of The Korean Prosecutors

The search and seizure were carried out in response to a complaint filed with prosecutors on May 12 by WEMIX investors, who accused the firm of fraud, embezzlement, and breach of trust.

This is the first time the prosecution has undertaken a search and seizure in connection with WeMade’s mandatory inquiry. On May 24, the prosecution performed a search and seizure in connection with Rep. Kim Nam-guk’s WEMIX scandal, however it was not a WeMade probe.

The Seoul Southern District Prosecutor’s Office Financial Investigation Division 1 has been conducting a large-scale search and seizure of WeMade headquarters in Sampyeong-dong, Bundang-gu, Seongnam-si, Gyeonggi-do, and market makers known to have been involved in WEMIX expedient market-making activities since the morning of June 30.

According to sources, WeMade has sparked several issues since 2021. Specifically, between November 2020 and January 2022, WeMade liquidated WEMIX 225.5 billion won without telling WEMIX users and transferred the cash to a firm, generating a great uproar. This was dubbed a “blink sale” by experts, and the occurrence emphasized the critical need for regulations governing the disclosure of virtual assets.

Moreover, towards the end of 2022, WEMIX’s circulation was suspected of fraudulent disclosure, and a legal arrangement with the country’s exchanges was reached. Some major South Korean crypto exchanges finally delisted WEMIX.

The prosecution is believed to have searched and seized not just WeMade but also WEMIX market makers. According to reports, CEO Henry Chang’s charges of breach of trust are also being investigated.

In December 2022, Korean tabloids revealed that CEO Henry Chang documented the circumstances around his usage of Signiel, a high-end residential facility, as a private house with corporate funds totaling 12 billion won ($9.1 million).

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