That Altcoin Won a Victory in Court! Price Jumped

In South Korea, the Seoul Central District Court ruled in favor of Wemade CEO Park Kwan-ho in a high-risk dispute over the altcoin WEMIX. The court ordered the bankrupt cryptocurrency exchange GDAC to return tokens worth over $7 million. This decision sheds light on critical issues in the cryptocurrency world, such as exchange operations, regulatory compliance, and investor protection.

Court decision in altcoin dispute

As an important legal development for the cryptocurrency sector, the Seoul Central District Court has ordered the now-defunct crypto asset exchange GDAC to return the WEMIX altcoin project, valued at approximately 7.31 million dollars, to Wemade CEO Park Kwan-ho. The court's decision supports Park's request for a temporary restraining order made on July 29, and requires the implementation of this instruction within 30 days, otherwise a daily penalty of 3 million won (approximately 2,300 dollars) must be paid.

The court rejected GDAC's market manipulation and money laundering allegations against Park. Instead, it raised questions about the exchange's ability to maintain a 100% reserve ratio and contradicted the exchange's previous statements. The court also indicated that a hacker attack GDAC suffered in April 2022, which caused approximately 20 billion won (about $14.48 million) in losses, could adversely affect the exchange's full recovery and ability to maintain sufficient reserves.

Crypto currency cases continue in South Korea.

GDAC suspended its operations just days before the 'Crypto Asset User Protection Act' came into effect on July 16. This closure resulted in Park being unable to withdraw the remaining WEMIX tokens, which are currently estimated to be worth approximately 10.1 billion won. This case has drawn attention to the practices of crypto exchanges in the event of closure or delisting. Typically, in such situations, exchanges allow full withdrawals. GDAC's implementation of withdrawal limits raised doubts about whether the exchange truly holds WEMIX tokens for all its customers. This decision could have broader implications for the cryptocurrency sector in South Korea, particularly in terms of exchange practices and regulatory compliance. In conjunction with the court decision, the WEMIX price rose by 3-4%.

Meanwhile, as we have also reported at Kriptokoin.com, legal proceedings against Terra co-founder Daniel Shin are ongoing. At the first hearing at the Seoul Southern District Court, Shin's lawyers requested more time for the defense. Shin did not personally attend the hearing and formed a team of 30 lawyers, including former judges, prosecutors, and experienced lawyers in crypto assets and capital market law, for his defense. The court accepted this request and set August 28th as the date for the second hearing. This decision disappointed prosecutors who are concerned about constant delays. The judge stated that they will review the lawyers' opinions and reconsider the date for the hearing preparation to determine the opportunity for defense and the order of questioning.

These two cases are a significant milestone for the cryptocurrency sector in South Korea. While the WEMIX token dispute highlights the importance of operational transparency and regulatory compliance for crypto exchanges, the Terra case reveals the complexity of legal proceedings involving crypto assets and the role of law in this industry. The dynamic nature of the crypto world further emphasizes the impact of such legal and regulatory developments on the sector.

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