After a long legal battle, former Wemad CEO Jang Hyun-Guk has been acquitted of market manipulation fees associated with Wemix tokens, marking a pivotal moment in the Korean crypto-regulated landscape.
The court found that there was insufficient evidence that Chan intentionally manipulated the market price of Wemix tokens despite misleading investors’ allegations about liquidity and sales of tokens.
According to Coinotag, the ruling highlights the challenges regulators face when proving their intentions in complex crypto market cases, and the need for clearer guidelines.
The South Korean court acquits Jang Hyun-Guk, former Wemad CEO of Wemix Market manipulation amid continuing regulatory scrutiny and token controversy.
In the termoil of Wemix Token, Chang Hyun-guk’s legal proof
The decision to acquit Jang Hyun-guk of the Southern District Court of Seoul represents an important legal precedent in South Korea’s evolving crypto-regulated environment. Chan, who led Wemade during the period of intense scrutiny, was accused of intentionally misrepresenting Wemix token distribution supplies in an artificially stable manner. However, the court ruled that the prosecution failed to demonstrate clear intent to manipulate market conditions through deceptive practices. The results raise important questions about the evidential standards necessary for Jang to not only resolve his criminal liability, but also prosecute crypto market manipulation under the South Korean Capital Markets Act.
Impact on investor trust and market dynamics
Despite his acquittal, Wemix Token suffered a dramatic loss in value, plunging nearly 97% from a peak of $24.71 in late 2021 to just $0.61 in mid-2024. This sudden decline reflects the broader investor skepticism supported by legal controversy and Wemade’s opaque token sales practices. Prosecutors allege that Wemade sold over $200 million in tokens without proper disclosure, used revenue to secure loans and invested from outside. The subsequent listing of Wemix in major South Korean exchanges further reduced liquidity and market confidence.
Wemix Foundation’s response to allegations of security breaches and concealment
In addition to Wemix Saga, the Wemix Foundation faced a fierce criticism of about $6 million, following the February 2024 hack, resulting in more than $8.6 million in token losses. The delay in public opening of the violation caused accusations of concealment aimed at minimizing market panic. Wemix Foundation CEO Kim Seok-Hwan addressed these concerns by describing it as a strategic decision aimed at stabilizing the market rather than hiding the incident. Nevertheless, the value of the token fell nearly 40% in the days following its announcement, highlighting the vulnerable trust between the project and its community.
Regulation and industry impacts are moving forward
The acquittal of Jang Hyun-Guk and the ongoing challenges facing Wemix tokens underscore the complexities of regulating digital assets in a rapidly evolving market. South Korean authorities are under pressure to improve their legal framework to properly address issues such as market manipulation, disclosure obligations and cybersecurity risks. Industry stakeholders, including exchanges and blockchain companies, need to increase transparency and investor protection to restore trust. This case serves as a warning narrative that underscores the importance of clear communication and robust compliance practices in the crypto sector.
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