Wemix Token Plummets 40% After $6.2M Hack, CEO Denies Cover-Up

Wemix Foundation CEO Kim Seok-hwan has denied allegations of a cover-up following a significant hack on its bridge, which resulted in losses exceeding $6.2 million. During a press conference, Kim asserted that there was no intention to conceal the incident, despite the delayed announcement. The hack, which occurred on February 28, involved the unauthorized withdrawal of over 8.6 million WEMIX tokens from the platform’s Play Bridge Vault. This vault facilitates the transfer of WEMIX tokens to other blockchain networks. The official announcement of the hack was made four days after the incident.

Kim explained that the delay in announcing the hack was due to the potential for further attacks and the need to avoid causing market panic. The hacker gained access to the system by stealing the authentication key for the company’s service monitoring system of Nile, its non-fungible token (NFT) platform. Over a two-month period, the hacker prepared for the attack, creating abnormal transactions and attempting to withdraw funds multiple times. The hacker successfully withdrew 13 times, taking away 8.6 million WEMIX tokens, which were subsequently sold on exchanges outside South Korea.

Upon discovering the breach, Wemix immediately shut down its servers and initiated an analysis of the incident. The company also filed a complaint with the Cyber Investigation Team of the Seoul National Police Agency, which has begun investigating the matter. Kim emphasized the risks associated with making a premature announcement, noting that identifying the penetration method was crucial to prevent further attacks. He also highlighted the potential for market panic if the hack was announced immediately, as the market had already been impacted by the sold assets.

During the press conference, Kim took responsibility for the delayed disclosure, apologizing to Wemix investors and acknowledging that he would be held accountable if anything went wrong. Despite efforts to avoid market panic, the WEMIX token experienced a significant drop in value following the announcement of the hack. The token's price fell by nearly 40% from February 27 to March 4, when the company finally disclosed the incident. The price continued to fluctuate, trading at $0.58 at the time of the announcement, which was still 17% below its pre-hack price.