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There’s a new player in South Korea’s crypto industry. A social media giant that wielded influence in the country’s internet scene in the early 2000s has rebranded its business and will soon be launching a new cryptocurrency.
Cyworld is relaunching its social media business under new management, according to Bitcoin.com. The firm is now owned by a consortium composed of five South Korean firms that include the entertainment company SKY E&M.
Former Cyworld CEO Jeon Jae-wan has reportedly sold the company for 1 billion won ($896,000) to its new owners, according to The Korea Herald. Industry watchers noted that the amount paid by the consortium to acquire the firm is the same amount Jeon owed former Cyworld employees. The consortium also announced plans to rebrand the business as “Cyworld Z.”
Aside from rebranding, Cyworld will also be issuing a new cryptocurrency called Dotori, an Ethereum*based token. The firm expects the new token to be listed on “one of the country’s (South Korea) top three crypto exchanges.”
However, Cyworld’s decision to issue a crypto has raised some eyebrows. The Korea Times reported that “concerns are growing that the new management may seek ‘speculative’ profits by issuing a new cryptocurrency and repeat its past mistakes.”
Dotori won't be the first cryptocurrency issued by Cyworld. The social media giant previously issued and sold another crypto called Cling in 2019, which ended in failure.
During Cling’s initial exchange offering, Cyworld attracted 484 million won in investments. However, the crypto’s price plunged by more than 96 percent within five months of the token’s listing in May 2019.
Cyworld’s financial condition also worsened with the failure of Que, its news curation service. Most of its employees later left the firm and former CEO Jeon Jae-wan was accused of not paying 1 billion won in overdue wages.
With such history, some are a bit wary of the new crypto. “But concerns remain that the firm may end up seeking a short-term profit by making use of the popularity of the Cyworld platform and fueling speculation of the cryptocurrency at a time when Cyworld Z's specific business models have not been unveiled,” the Korea Times added.
Launched in 1999, Cyworld became one of the first social media companies in South Korea that turned profitable after attracting as many as 25 million users at the height of its popularity. However, the firm lost its appeal with the entry of foreign firms such as Facebook.
Under the rebranded Cyworld Z, the company plans to relaunch its service by March once beta testing is done. The company expects that the new service will attract 32 million users.
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