South Korea’s Tax Authority Imposes $41 Million Tax on Wemade Over WEMIX Cryptocurrency Case
Wemade has been slapped with a hefty $41 million fine (KRW 53.7 billion) by South Korea’s National Tax Service (NTS).
South Korean video game developer Wemade has been slapped with a hefty $41 million tax (KRW 53.7 billion) by South Korea’s National Tax Service (NTS) after conducting a tax investigation on the cryptocurrency WEMIX.
WEMIX was issued by Wemade and its subsidiary Wemade Tree. The surcharge was imposed following an integrated corporate tax investigation by the Central Regional Tax Office spanning the years 2019 to 2022.
Wemade disclosed on January 3 that they are facing a surcharge amounting to 53.69 billion won, with the payment deadline set for the 29th of the upcoming month. According to reports, a representative from Wemade stated, ‘This is the tax generated from the accounting and tax treatment of Wemix from 2019 to 2022, and we plan to pay it truthfully.’
The official also expressed optimism stating, “As the tax treatment of virtual assets becomes clearer, it will contribute to increased business stability.”
Wemade Tree, initially established by Wemade during its foray into the blockchain business in January 2018, was later absorbed into the company’s main operations in February 2022.
WEMIX Investors Allege Unfair Trading Charges
In July last year, South Korean authorities conducted simultaneous raids on WeMade, the company behind the cryptocurrency WEMIX and Hyperism, the asset management firm handling WEMIX’s market-making activities.
Several Korean media reports then indicated that the action followed the passage of South Korea’s Virtual Asset Protection Act by the parliament – the new law designed to curb illegal trading practices like market price manipulation and insider trading.
In May 2023, WEMIX investors formally lodged a complaint against Hyun-guk Jang, the representative of WeMade. The allegations against Jang include charges of fraud and fraudulent unfair trading under the Capital Market Act.
As Wemade navigates these regulatory hurdles, the broader cryptocurrency industry watches closely, recognizing the increasing importance of regulatory compliance in fostering long-term viability and trust.
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