Summary
South Korean game developer Wemade is under investigation by local prosecutors over allegations of unfair profits and potential evasion of regulations. The investigation focuses on whether Wemade’s affiliated decentralized exchange, PNIX, and its digital asset storage system, Play Wallet, are withholding private keys from users, which would allow them to avoid reporting requirements. The Financial Intelligence Unit, the local financial sector’s supervisor, is also investigating similar complaints against Wemade. Wemade has stated that PNIX and Play Wallet are not subject to compliance requirements because they do not control users’ private keys or assets. The company has not explicitly confirmed whether the services offer users private keys.
Key Points
1. Wemade, a South Korean Web3 game developer with a market capitalization of 1.6 trillion Korean won ($1.2 billion), is under investigation by local prosecutors for allegations of unfair profits and potentially evading regulations related to virtual asset service providers.
2. The investigation focuses on whether Wemade-affiliated decentralized exchange PNIX and its digital asset storage system Play Wallet withhold private keys from users, thus avoiding reporting requirements mandated for platforms that do not grant users private keys.
3. The Financial Intelligence Unit, the local financial sector’s supervisor, has also received similar complaints and initiated an investigation into Wemade. Wemade’s WEMIX team has responded to the allegations, stating that PNIX DEX and Play Wallet services are not subject to compliance requirements and that they do not have control over users’ private keys or assets.