Jang Hyun-guk, the former representative of Wemade (current representative of Nexus), has been acquitted in a first trial amid allegations of manipulating the circulation of the cryptocurrency (coin) 'Wemix.'
However, the court stated that although it found no guilt, at the time of the incident, the Act on the Protection of Users of Virtual Assets had not been enacted, noting that 'there were no relevant regulations due to gaps.'
The Southern Seoul District Court's Criminal Division 13, led by Director General Kim Sang-yeon, declared Jang not guilty of violating the Capital Markets Act on the 15th. Wemade, which was also charged under joint punishment provisions, received a not guilty verdict.
Jang is accused of misleading investors into buying Wemix coins by falsely announcing that he would halt the liquidity (cash-out) of Wemix coins in early 2022, which led to profits that are difficult to quantify, such as stock price gains for Wemade and preventing declines in Wemix coin prices.
However, the court did not see Jang's statements as having the intent to manipulate prices by utilizing his position.
The court remarked, 'This case arose due to the controversy over (Jang) having supported the Wemade stock price by disposing of Wemix,' and concluded that it is difficult to logically conclude that the remarks to suspend liquidity were made to prevent a stock price decline.
If Jang used the money from cashing out to support Wemade's performance, it would act as a positive factor for Wemade's stock price.
The court also stated that Wemix coins and Wemade stocks should be viewed separately, noting, 'Looking at the context before and after the statements, the defendant's actions were directed at Wemix users and not at Wemade investors.'
Assets affected by the Capital Markets Act are limited to financial investment products such as Wemade stocks. Wemix coins fall under virtual assets and are not included here.
The court explained, 'Specifically, we must distinguish between Wemade stocks and Wemix coins,' stating that 'Wemade stocks are listed securities issued by Wemade, while Wemix is categorized as a virtual asset.'
It continued, 'Due to differences in nature and issuing entities, regulations and supervision differ,' and stated, 'In legal terminology, they are clearly distinguished between investors and users.'
Earlier in the first trial, the prosecution argued that since 2021, Wemix and Wemade stocks have moved together by nearly 90%, indicating that decoupling their values is difficult, but this argument was not accepted.
The court, however, noted that 'the Act on the Protection of Users of Virtual Assets was enacted after this incident,' pointing out that 'at that time, there were gaps with no relevant regulations.'
It added, 'We should consider what legal evaluation the defendant would receive if he were to conduct the same actions today, after the amendment to the Act on the Protection of Users of Virtual Assets,' but clarified that it was not within the scope of their judgment.
The Act on the Protection of Users of Virtual Assets, established to ensure order in the virtual asset market and to protect users, was enacted by the National Assembly in 2023, coming into effect on July 19 of the previous year.