The prosecutor's office claims that the subsidiary decentralized exchange PNIX and the digital wallet Play Wallet, managed by Wemade, have not been registered with the regulator. According to local law, some decentralized platforms may be exempt from registration if users retain control of their private keys.
The Wemade management claims that PNIX and Play Wallet fall under this exception. Play Wallet is a decentralized service whose team does not control users' private keys and assets, and the PNIX trading platform only processes orders for the purchase and sale of crypto assets. In addition, transactions are processed using smart contracts, and not personally by the service team.
However, the prosecutor's office questioned Wemade's explanations, so the police launched an investigation into whether PNIX and Play Wallet deny users access to their private keys. As for the lack of registration, South Korea's Financial intelligence Unit (FIU) has previously warned cryptocurrency platforms that they face a large fine for violating this requirement.