South Korea’s Financial Supervisory Service (FSS) is acting to exclude Gopax from its Virtual Asset Task Force (TF). The move comes after Gopax relisted Wemix prematurely, disregarding the self-regulatory guidelines set by the Digital Asset Exchange Association (DAXA) after Wemix was delisted for falsifying its circulating supply, in turn leading to its expulsion from the country’s top five crypto exchanges a year ago.

According to sources on Tuesday, the FSS recently removed all Gopax officials from its internal task force, which was formed in August 2023 to discuss the enactment of an enforcement decree to the law aimed at protecting individuals using virtual assets ahead of the law’s implementation, scheduled for July 2024.

The TF has been a forum for discussions involving representatives from the five major virtual asset exchanges (Upbit, Bithumb, Coinone, Korbit, and Gopax) and experts in the field. But the exclusion of Gopax members by the top financial regulator has drawn the industry’s attention.

Sources in the market attribute Gopax’s exclusion from the TF to its relisting of Wemix on November 8th, 2023. Wemix lost support for trading from the exchanges on December 8 last year, and the DAXA regulates that “a certain period must pass from the date trading support ends for a specific coin before relisting is possible.”

While the authorities and the industry interpret the “certain period” as one year, Gopax relisted Wemix before this period lapsed, leading to disciplinary actions such as a three-month voting rights restriction imposed by the DAXA.

Following Gopax’s exclusion from the TF, senior Gopax executives reportedly explained the circumstances of its Wemix listing to the FSS, but the explanation was deemed insufficient, sources said.

Both Korbit and Bithumb also relisted Wemix on December 8 and 12 respectively but did not face consequences such as TF exclusion as the “certain period” defined by the DAXA had passed. Currently, Wemix is tradable on all major exchanges except Upbit.

Meanwhile, prosecutors investigating the Wemix circulating supply fraud are reportedly launching a full-scale reinvestigation in connection with the incident.

By Kim Hee-rae and Minu Kim

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