- Wemade, a leading Korean gaming company, owes over $40 million in unpaid taxes stemming from WEMIX tokens issued between 2019-2022, representing a significant financial hit
- The unpaid taxes include steep 50% penalties on top of the base amount, which Wemade plans to pay in full by the 2024 deadline
- Despite the tax debt, Wemade recently launched a $100 million Web3 investment fund in partnership with Whampoa Group to expand into blockchain gaming and Middle East markets
Wemade, a leading Korean gaming company, has come under fire from tax authorities after unveiling a $100 million Web3 investment fund last month. The company owes over $40 million in unpaid taxes from an unrelated incident. This tax debt represents a significant hit to Wemade’s finances.
Background on the Unpaid Taxes
According to a regulatory filing, the unpaid taxes stem from WEMIX tokens issued by Wemade’s subsidiary, Wemade Tree, between January 2019 and 2022. The total tax bill, including penalties, amounts to 537 billion won ($41 million). This is nearly 10% of Wemade’s total equity.
Authorities imposed steep penalties of up to 50 billion won ($38 million) on top of the base tax amount. Wemade said it plans to pay the full amount by the February 2024 deadline.
About WEMIX Tokens
First launched in 2020, WEMIX is an Ethereum-based utility token used across Wemade’s ecosystem of Web3 games and apps. The token has surged over 635% since inception and currently trades around $2.64. Its diluted market cap stands at $2.5 billion.
South Korea banned ICOs in 2017 but may soon reverse course and allow token sales again (with a 20% tax on profits). This shift could benefit Wemade’s Web3 expansion plans.
Wemade’s $100 Million Web3 Fund
On December 22, 2022, Wemade partnered with Singapore’s Whampoa Group to launch a $100 million Web3 investment fund. The capital will back digital asset projects in the Middle East as part of Wemade’s growth into the region.
Whampoa will also become an ecosystem partner for Wemade’s Wemix Play gaming hub in the Dubai International Financial Centre. This collaboration comes on the heels of Wemade’s rapid push into Web3 gaming over the past year.
Conclusion
The tax penalty represents an unexpected financial setback for Wemade as it ramps up Web3 operations. However, the company appears committed to paying the debt on schedule. Once resolved, Wemade can refocus on leveraging its new $100 million fund to capitalize on emerging opportunities at the intersection of gaming and blockchain technology.
