South Korean gaming giant WeMade, known for creating the WEMIX cryptocurrency, is currently embroiled in a significant legal battle with 27 current and former employees from its blockchain division.
The lawsuit, valued at $11 million, centers on allegedly unpaid performance-based bonuses that were promised in WEMIX tokens.
These bonuses were specifically connected to the employees’ contributions to the WEMIX token project, which launched on cryptocurrency exchanges in 2020.
The case is particularly noteworthy as it involves both current employees at WeMade and former staff members from WeMade Tree, the company’s blockchain subsidiary that merged with the parent organization in February 2022.
Legal Arguments and Evidence Presented
The core of the legal dispute revolves around the nature and enforceability of the bonus agreement.
The plaintiffs’ legal team has presented compelling evidence, including an email that allegedly contains explicit promises of WEMIX token compensation.
According to their attorney, employees were required to maintain a three-year commitment to the company to qualify for these bonuses. This requirement suggests a structured compensation plan rather than an informal arrangement.
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However, WeMade’s defense team has taken a contrary position, firmly denying the existence of any verbal or formal contracts regarding WEMIX compensation.
They argue that while a compensation plan was initially considered, it was ultimately abandoned due to the complex regulatory landscape surrounding virtual assets and the absence of clear legal and accounting standards at the time.
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Regulatory Context and Implications
The case highlights the broader challenges facing cryptocurrency companies in managing employee compensation through digital assets.
WeMade’s defense strategy particularly emphasizes the regulatory uncertainties that existed during the relevant period, pointing to the lack of established guidelines for handling virtual assets as a key factor in their decision-making process.
The aspect of the case underscores the ongoing difficulties companies face in navigating the intersection of traditional employment contracts and cryptocurrency-based compensation, especially in jurisdictions where regulatory frameworks for digital assets are still evolving.
Broader Cryptocurrency Legal Landscape
This lawsuit emerges amid a series of significant legal actions in the cryptocurrency sector.
Notably, Celsius is currently seeking to appeal a court decision that denied its $444 million claim in the FTX lawsuit, while the Hawk Tuah token case has seen victims filing a lawsuit against Hailey Welch for an alleged rug pull, with the token’s value plummeting 93% post-launch.
Additionally, FTX’s bankruptcy estate has recently filed 23 new lawsuits targeting major industry players including Binance, SkyBridge Capital, and Crypto.com, seeking to recover assets allegedly tied to Sam Bankman-Fried’s influence-buying campaign.
These concurrent legal actions collectively illustrate the increasing complexity and frequency of cryptocurrency-related litigation, reflecting the industry’s ongoing maturation and regulatory challenges.
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