South Korean Court Orders Defunct GDAC to Return $7.3M in WEMIX to Wemade CEO

A South Korean court ruled in favor of Wemade CEO Park Kwan-ho, ordering the now-defunct GDAC crypto exchange to return 7.8 million WEMIX tokens, worth $7.31 million. This ruling is the latest development in the ongoing dispute between Park Kwan-ho and GDAC.

The decision is a follow-up to the earlier July verdict where the Seoul Central District Court granted Park a provisional disposition, highlighting GDAC’s failure to comply. Park could not access the tokens due to GDAC’s shutdown.

Court Rejects GDAC’s Claims Against Wemade CEO

The court rejected GDAC’s latest challenge and ordered the trading platform to return the tokens within 30 days. If GDAC does not comply, it faces a daily penalty of $3 million after the deadline. The court also dismissed the exchange’s allegations of market manipulation and money laundering against Park, citing its failure to maintain a 100% reserve ratio, a key requirement for cryptocurrency exchanges.

Read also: South Korea Mandates Insurance for Closed Crypto Exchanges

The ruling also mentioned a 2022 hacker attack that cost GDAC 20 billion won ($14.48 million), likely impacting the exchange’s ability to recover reserves and fulfill obligations to investors. GDAC shut down on July 16, shortly before the implementation of South Korea’s ‘Virtual Asset User Protection Act,’ which tightened regulations for cryptocurrency platforms.

Park’s case highlights the challenges faced by investors and exchanges in the unregulated digital asset space, where exchange shutdowns, reserve mismanagement, and legal disputes often prevent users from recovering their funds.

This court decision increases the pressure on defunct crypto exchanges to comply with legal and regulatory standards. It also highlights the challenges investors face in reclaiming lost assets in South Korea.