South Korean gaming company Wemade has found itself in a financial tangle, owing $41 million in unpaid taxes to the country’s authorities. This revelation comes shortly after Wemade collaborated with Singapore-based Whampoa Group to launch a substantial $100 million Web3 fund last month. In this article, we’ll explore the details surrounding Wemade’s tax predicament, the background of the $100 million Web3 fund, and the potential impact on the company’s financial outlook.
Unveiling the Tax Debacle
Wemade, known for its ventures in the gaming industry, recently disclosed an outstanding tax debt of 53.7 billion won ($41 million) related to the issuance of Wemix tokens between 2019 and 2022. This amount represents around 10% of the company’s equity. The disclosure was made in a filing with Kosdaq on Jan. 3, explaining that the tax debt is set to be paid by Feb. 29, 2024, following legal procedures. Reports suggest that tax authorities have imposed an additional penalty of up to 50 billion won ($38 million).
Wemix Tokens and Web3 Ventures
The unpaid taxes are specifically linked to WEMIX tokens issued by Wemade’s subsidiary, Wemade Tree. These tokens, initiated in 2020, have seen impressive growth, returning 635% since their inception. Currently trading at $2.64 with a diluted market cap of $2.5 billion, WEMIX tokens operate on the Ethereum Virtual Machine-compatible protocol, fueling Wemade’s Web3 applications.
Regulatory Landscape in South Korea
The taxation issue unfolds against the backdrop of South Korea’s evolving stance on cryptocurrencies. In 2017, the country banned initial coin offerings (ICOs), but there are ongoing discussions about reversing this ban and implementing a 20% tax on profits generated from crypto transactions.
Web3 Fund Launch and Collaborative Initiatives
Despite the tax setback, Wemade made headlines on Dec. 22, 2023, by launching a $100 million Web3 fund in partnership with Whampoa Group. This collaborative effort aims to invest in digital asset initiatives in the Middle East. Whampoa Digital is set to become an ecosystem partner to Wemade’s Wemix Play Center in the Dubai International Financial Centre Innovation Hub. The fund capital will support developers associated with Wemix Play.
Wemade‘s financial challenges underscore the complexities that can arise in the rapidly evolving landscape of blockchain and gaming industries. As the company navigates these issues, the launch of the $100 million Web3 fund signals its commitment to exploring digital asset opportunities in collaboration with Whampoa Group.
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Q: Why does Wemade owe $41 million in taxes?
The tax debt is related to the issuance of Wemix tokens by Wemade’s subsidiary, Wemade Tree, between 2019 and 2022.
Q: What is the status of WEMIX tokens in the market?
WEMIX tokens, initiated in 2020, have shown remarkable growth, returning 635% since inception. They currently trade at $2.64 with a diluted market cap of $2.5 billion.
Q: What is the $100 million Web3 fund launched by Wemade?
Wemade launched a $100 million Web3 fund in collaboration with Whampoa Group to invest in digital asset initiatives in the Middle East, showcasing its commitment to exploring opportunities in the blockchain space.