[비즈한국] Cyworld has declared its "resurrection" once again. The latest player to step up is blockchain technology company Sigma Chain. However, the legal dispute surrounding the business rights and domain remains ongoing. Immediately after Sigma Chain's press conference on this day, Beta Labs directly challenged the validity of the business rights transfer, further deepening the uncertainty surrounding Cyworld’s relaunch.
Sigma Chain held a press conference at 2:00 PM on the 10th at the Courtyard by Marriott Seoul Namdaemun, announcing the completion of the Cyworld acquisition and its future service strategy. The company plans to launch a beta service in October, followed by data restoration and stabilization, with a full-scale official service release scheduled for the first half of next year.
During the event, Peter Han, Director of Global Marketing at Sigma Chain, stated, “Cyworld is South Korea’s digital time capsule,” adding, “We will turn memories into assets, content into value, and activities into new opportunities.” He explained that while maintaining the emotional appeal of the original "mini-hompy" (personal homepages), they are reviewing plans to allow users to turn their content into NFTs if they wish, and to use stablecoins issued by financial institutions as a means to purchase the traditional cyber-currency, 'Dotori' (Acorns).
As for revenue models, they proposed not only advertisements and item sales but also licensing businesses utilizing the intellectual property (IP) of user content and creator reward systems. They also revealed plans to expand the service overseas, starting with Southeast Asia and eventually reaching North America and Europe. They further reported that they are currently in the process of verifying approximately 17 billion pieces of existing data and are working on restoration so that past users can view their records, including photos, mini-hompies, and guestbooks.
Grand ambitions, but lacking concrete details… Some individual investors also in attendance
However, compared to the blueprint presented by Sigma Chain on this day, concrete details were scarce. Sigma Chain emphasized that it had secured in-house development staff and technology, as well as the initial funds required for service launch and operations. They mentioned that they are in negotiations for additional investment with major overseas investors and strategic partners, with some investments already in the final stages. Nevertheless, they did not answer questions regarding the scale of secured funds, future operating costs, or the size of investments.
Although they touted NFTs, blockchain, and content reward structures as key features of the new Cyworld, they did not provide detailed explanations on how these technologies would actually be implemented in the service. Park Hyung-keun, a director at Sigma Chain, replied, “The founding members who know Cyworld best are working with us, and we intend to graft the existing technical capabilities of Sigma Chain onto it,” adding, “We will announce all our plans when we open the beta service.”
The legal dispute surrounding the business rights and domain, which serves as a premise for the service’s resumption, also remains unresolved. In particular, the court has issued an injunction against the disposal of Cyworld’s primary domain, ‘cyworld.com’. In April of last year, the Seoul Central District Court accepted an application for an injunction filed by Beta Labs against Cy Communications. Consequently, Cy Communications is prohibited from disposing of the domain through means such as sale or transfer.
Sigma Chain stated that it is aware of the domain dispute but insisted there would be no problems for future services because it utilizes the ‘co.kr’ domain. Director Park drew a line, stating, “The dispute between the previous operators is a separate matter from our company.”
However, since Sigma Chain is pursuing the resumption of the service based on the Cyworld brand name and existing user data, questions arise as to whether it is entirely unrelated to the previous dispute over the business rights transfer. Kim Ho-kwang, former CEO of Cyworld, argues that there were procedural flaws in the process of transferring business rights from Cyworld Z to Cy Communications, and therefore, the subsequent transfer to Sigma Chain cannot be recognized as valid.
Meanwhile, in addition to the press, several external individuals who attended for investment purposes were spotted at the press conference. A woman in her 50s met at the venue said, “I came here for investment purposes,” adding, “I was introduced by an acquaintance and came to listen to what they had to say.” While Sigma Chain explained that people affiliated with the company were also in attendance, they did not disclose the specific composition of attendees or how they were invited.
Former Cyworld Z CEO Kim Ho-kwang: “There are issues with the validity of the transfer”
Cyworld’s business rights have changed hands several times. Cyworld Z, which took over management from former CEO Jeon Je-wan in 2021, transferred the business rights, assets, and user data to Cy Communications two years ago. Subsequently, Sonid (now JK Synapse), a major shareholder of Cy Communications, set out to sell the relevant business rights, and Sigma Chain claims to have finished the acquisition process last month after taking them over.
Former Cyworld Z CEO Kim Ho-kwang visited the Sigma Chain press conference site in person on this day and held a separate press conference immediately afterward in the same location to challenge the validity of the business rights transfer. CEO Kim claimed that the major shareholders were neither consulted nor notified at the time, and that it has not been verified whether the 5 billion won acquisition price was paid normally. According to former CEO Kim, the transaction records could not be verified in the Hana Bank account that Cyworld Z used as its business account.
Former CEO Kim Ho-kwang also pointed out that Sigma Chain’s plan to restore and manage Cyworld data using blockchain needs sufficient review regarding the massive data processing costs and personal information protection issues. He warned, “Blockchain is not a panacea,” adding, “They must first have proper data restoration processes and information security plans in place.”
Former CEO Kim argued, “If Cy Communications did not have the authority to transfer the Cyworld domain and business rights, then the subsequent transfer to Sigma Chain is also invalid.” He added, “If they are returning customer information safely, why wouldn't we support them? The problem is the current process and the contract. They must first prove their funds and demonstrate that they can protect user data safely.”