Wemix.fi suspends lending amid stablecoin liquidation issues

Wemix.fi, the decentralized finance platform for cryptocurrency Wemix, announced the suspension of its lending and borrowing services on July 30. This is just the latest twist in the story of the crypto behind the South Korean blockchain game developer Wemade.

Wemix.fi said the suspension of lending, borrowing, and liquidation functions was connected with “issues related to the liquidation of WEMIX$,” the platform’s USD-pegged stablecoin. Notice of resumption of services would be forthcoming, the announcement promised. Wemix.fi did not elaborate on the liquidation of its stablecoin.

CEO’s resignation rocked the coin’s value

The suspension of services comes a day after the news broke that former Wemade CEO Jang Hyun-kook had sold his shares in the company, driving the price of Wemix (WEMIX) to the year’s low of $0.94. The crypto’s price also took a beating in March when Jang resigned. Jang was said to be acting to reduce legal risk to the company after the crypto was tied to a political scandal last year.

After Jang’s resignation, a fork of its Wemix chain that saw a halving of Wemix issuance and the introduction of the Wemix Pay service and a second game token. A new governance mechanism was also introduced. Those innovations did not reverse the Wemix price decline, however.

Wemade had problems even before those

Wemix has had a tumultuous history. Wemade introduced its stablecoin when it launched its mainnet in May 2022. It was fully collateralized by USD Coin (USDC). At the beginning of November of that year, it received a $46 million investment from Microsoft and its Legend of Mir game had over 200 million signups.

In late November 2022, the company was accused of misrepresenting the amount of Wemix in circulation and delisted by South Korea’s main cryptocurrency exchanges. In January of this year, Wemade was hit with a $41 million tax bill after an audit. The following month, Wemade faced fraud charges for failing to register and report its activities with authorities. Wemade disputed those claims.