Shortly after launching a $100-million Web3 fund with Singapore-based Whampoa Group last month, South Korean gaming firm Wemade has disclosed that it owes the country’s tax authorities 53.7 billion won ($41 million) in unpaid taxes in an unrelated incident. The amount is equal to approximately 10% of the company’s equity.

According to a Jan. 3 filing with Kosdaq, the unpaid taxes pertain to WEMIX tokens issued by its subsidiary, Wemade Tree, from January 2019 to 2022. “The ‘imposed amount (KRW)’ above is the sum of the amount stated in the tax audit result notice imposed on our company and Wemade Tree Co., Ltd,” Wemade said while explaining that the tax debt was “scheduled to be paid within the deadline according to legal procedures” by Feb. 29, 2024. Local news reports suggest that tax authorities imposed a penalty of up to 50 billion won ($38 million).

First issued in 2020, WEMIX tokens have returned 635% since inception and currently trade at $2.64 with a diluted market cap of $2.5 billion. It is an Ethereum Virtual Machine-compatible protocol that powers Wemade’s network of Web3 applications. In 2017, South Korea banned initial coin offerings but is currently considering reversing the ban and instead imposing a 20% tax on profits arising from crypto transactions.

On Dec. 22, 2023, Wemade launched a $100-million Web3 fund in conjunction with Whampoa Group to invest in digital asset initiatives in the Middle East. As part of this collaboration, Whampoa Digital will be an ecosystem partner to Wemade’s Wemix Play Center in the Dubai International Financial Centre Innovation Hub, with fund capital supporting Wemix Play developers.

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