South Korean gaming company Wemade, following the launch of a $100 million Web3 fund in partnership with Singapore's Whampoa Group, recently disclosed an unrelated tax issue. The company owes South Korea's tax authorities 53.7 billion won (approximately $41 million) in unpaid taxes, a figure that represents about 10% of the company's share capital.
This tax liability stems from WEMIX tokens issued by Wemade's subsidiary, Wemade Tree, from January 2019 to 2022. In a January 3rd filing with KOSDAQ, Wemade outlined the outcome of a tax audit imposed on both the parent company and Wemade Tree. The company confirmed its plan to settle the due amount by February 29, 2024, following legal procedures. Local reports have also highlighted that the tax authorities may levy fines up to 50 billion won ($38 million).
The WEMIX token, first introduced in 2020, has seen a substantial increase in value, yielding a 635% return since its launch. Currently, it trades at $2.64 and boasts a diluted market cap of $2.5 billion. It operates on an Ethereum Virtual Machine-compatible protocol and is integral to Wemade’s array of Web3 applications. Interestingly, South Korea, which banned initial coin offerings in 2017, is now contemplating lifting this ban and considering a 20% tax on profits from cryptocurrency trading.
The announcement of the Web3 Fund came on December 22, 2023, when Wemade and Huangpu Group initiated their joint venture. This fund, valued at $100 million, is dedicated to investing in digital asset projects, specifically in the Middle East. The collaboration will see Huangpu Digital becoming a key ecosystem partner in Wemade’s Wemix Play center based in the Innovation Center of Dubai International Financial Center, providing crucial financial support to developers working with Wemix Play.
Wemade's recent financial commitments and strategic partnerships, alongside its tax liabilities, reflect the complex and evolving nature of the gaming industry's engagement with digital assets and Web3 technologies. As the company navigates these challenges, its role in shaping the future landscape of gaming and digital finance continues to draw attention.
