Web3 Gaming Developer Wemade Under Scrutiny
South Korean prosecutors have launched an investigation into Wemade, a developer of Web3 games with a market capitalization exceeding $1 billion. The company is suspected of failing to register officially as a virtual asset service provider, thereby allegedly violating local laws and gaining unfair profits over an extended period.
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South Korean prosecutors have launched an investigation into Wemade, a developer of Web3 games with a market capitalization exceeding $1 billion. The company is suspected of failing to register officially as a virtual asset service provider, thereby allegedly violating local laws and gaining unfair profits over an extended period.
Under South Korean regulations, all cryptocurrency companies are required to register and report to the regulatory authority, except for those transferring private keys directly to users. Although Wemade itself does not offer such services, its associated decentralized exchange, PNIX, and the Play Wallet system are considered by law enforcement to breach this regulation.
The situation has also caught the attention of the financial intelligence department. Wemade's representatives have responded to these allegations, vehemently denying all accusations. They argue that the team does not manage users' assets in Play Wallet and that trading on PNIX is conducted solely through smart contracts.
Read more about the key aspects of cryptocurrency regulations in South Korea in our article. Additionally, there's a buzz around a potential investigation by the South Korean regulator into the crypto exchange OKX for engaging in promotional activities without the proper registration.
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