[TL;DR]
- The excessively long 70-day settlement cycle and centralized fund management of TMON/WEMAKEPRICE created a risky structure where seller funds could be diverted to other businesses, and the lack of transparency prevented any early warning system from functioning.
- Smart contract-based automated escrow eliminates human intervention, ensures real-time transparency, removes single points of failure through decentralization, and drastically reduces costs by eliminating intermediaries.
- By fully abstracting blockchain complexity and seamlessly integrating with existing payment systems, WaaS allows users to benefit from secure and transparent blockchain escrow without any technical barriers.
1. Structural Problems of E-commerce Escrow Revealed by the TMON/WEMAKEPRICE Incident
1.1. What Happened: A KRW 170 Billion Settlement Delay Crisis
In mid-July 2024, payment delays and unsettled payments emerged for travel product sellers on TMON and WEMAKEPRICE, subsidiaries of Qoo10. Initially dismissed as a minor technical glitch, the issue soon escalated into a crisis that rocked the entire Korean e-commerce industry.
The signs were subtle at first. In early July, posts about WEMAKEPRICE’s unsettled payments began appearing on seller forums. At first, it seemed like a typical settlement delay between platforms and sellers, but the severity quickly became apparent.
On July 11, news articles began to surface, and WEMAKEPRICE claimed a technical error in their system was causing settlement delays. They announced efforts to fix the issue and promised to resume payments. However, this was merely a temporary appeasement and not a fundamental solution.
The situation deteriorated rapidly. On July 17, Qoo10 issued a statement attributing the issue to temporary system glitches during platform upgrades and offered compensation plans for affected WEMAKEPRICE sellers, such as late interest payments and fee waivers. Still, seller trust had already been severely damaged.
The decisive moment came on July 22. Until then, Qoo10 insisted TMON’s settlements were unaffected and only WEMAKEPRICE was experiencing delays. But on that day, TMON officially announced indefinite settlement delays, confirming that this was not just a system failure but a structural issue.
On July 23, following WEMAKEPRICE, TMON also halted payments, prompting major retailers to cancel contracts and remove their listings. Travel agencies began canceling flights and hotel bookings unilaterally, causing widespread consumer harm—a domino effect had begun.
The scale of the crisis was beyond imagination. TMON and WEMAKEPRICE had changed their settlement cycles in October 2023, and by July 2024, they still had not paid out seller revenues. This indicated that the issue wasn’t isolated but a long-standing systemic failure.
More concerning were allegations of fund misappropriation. When Wish acquired WEMAKEPRICE for $173 million (KRW 230 billion) in February 2024, rumors suggested that settlement funds were diverted for the acquisition and couldn’t be replenished—implying seller funds were possibly used to finance business expansion without consent.
Eventually, on July 24, recognizing the gravity of the non-payment crisis, payment providers like Naver Pay, Kakao Pay, Toss Pay, and Payco withdrew from TMON and WEMAKEPRICE, completely halting refunds. The result: a crippling paralysis of the payment ecosystem.
1.2. The Risk of a 70-Day Settlement Cycle and Centralized Fund Management
At the heart of the TMON/WEMAKEPRICE crisis was an abnormally long settlement cycle. The platforms operated under a structure where seller payments could be delayed for up to 70 days. Compared to offline commerce—where payment is immediate after a sale—a two-month delay is clearly irrational and dangerous.
Such long settlement periods pose more than just inconvenience. The time gap between product sale and payment creates ample opportunity for funds to be diverted. In effect, the platform can use seller money as an interest-free loan.
The problem worsens with centralized fund management. Traditional escrow systems rely on platforms to hold buyer payments and release them once the transaction is complete. However, there's no way for sellers to verify the actual fund status. Sellers are left to rely solely on the platform’s word.
CEO Koo Young-bae admitted during a National Assembly hearing that some TMON and WEMAKEPRICE settlement funds were used for the Wish acquisition, though he claimed only KRW 40 billion in cash was used and repaid within a month. Nonetheless, this confirmed the shocking possibility that escrow funds can be temporarily repurposed for other business needs.
Another issue with centralized systems is the single point of failure. If one platform fails, tens of thousands of sellers and hundreds of thousands of consumers are affected simultaneously. Small business owners who couldn’t recover payments faced existential threats, as operational expenses like rent, salaries, and raw materials continue to accrue. A chain of bankruptcies became inevitable.
1.3. Lack of Transparency and Regulatory Blind Spots
The root cause of this prolonged crisis was a lack of transparency. Traditional e-commerce escrow systems are black boxes. Sellers have no visibility into where their funds are stored, when they will be released, or their current status. They must rely solely on information provided by the platform.
Some sellers had been raising concerns about delayed settlements for over a year. However, the government failed to act—highlighting a lack of early warning systems. If payment statuses had been transparent and monitored in real time, the issue might have been caught early before growing into a full-scale disaster.
Worse yet, the platforms operated in a regulatory grey zone. TMON and WEMAKEPRICE, classified as intermediaries, were not subject to large-scale retail regulations. This allowed them to bypass stricter rules applied to traditional distributors while still functioning as massive sales platforms—benefiting from regulatory arbitrage.
Since the Korean e-commerce sector is less than two decades old, it lacks a mature legal and regulatory framework. The speed of technological advancement has far outpaced policy development, leaving new types of risk unaddressed.
The lack of transparency eroded trust across the entire market. Investor sentiment declined, affecting not just the platforms in question but smaller and honest e-commerce platforms as well.
Ultimately, today’s e-commerce escrow system relies on centralized trust. Both buyers and sellers must trust the platform to manage funds responsibly. Once that trust is broken, the damage is widespread. This crisis clearly illustrates the urgent need for a new escrow system that does not rely on trust.
2. Innovative Solutions Proposed by Blockchain
2.1. Smart Contract-Based Automated Escrow
The most fundamental issue revealed by the TMON/WEMAKEPRICE crisis was that escrow systems could be manipulated by human decisions. If a platform’s management decided to repurpose seller settlement funds for other uses, there was no way to stop it in real time. Smart contracts completely eliminate such human intervention.
A smart contract is a self-executing program where transactions are carried out automatically once predefined conditions are met. In the context of escrow, smart contracts hold funds or assets until specific conditions are fulfilled, enabling automated and trustless transactions between parties. For example, when a buyer places an order, the payment is deposited into a smart contract. Once delivery is confirmed, the funds are automatically transferred to the seller.
The key strengths are predictability and irreversibility. Smart contracts operate based on code-defined agreements stored immutably on the blockchain. Once deployed, no one can modify the terms or divert the funds. This ensures an unprecedented level of security and efficiency.
In practice, this means the buyer and seller agree on conditions, the buyer pays the agreed amount, and the smart contract holds the funds. The seller ships the product, and once the buyer confirms receipt, payment is automatically released. This end-to-end process is immune to tampering or delays.
Compared to traditional escrow, the difference is stark. Conventional systems rely on third-party intermediaries to hold and release funds. Smart contracts automate this, reducing risks of human error or fraud. As seen in the TMON/WEMAKEPRICE crisis, the intermediary itself can become the biggest vulnerability.
Even dispute resolution can be automated. Many crypto escrow platforms offer mechanisms to lock funds, allow mutual agreement, or involve neutral arbitrators. Rules can be encoded to enable automatic refunds or conditional releases based on third-party decisions.
2.2. Solving Trust Issues Through Decentralization
The core flaw of traditional e-commerce escrow is absolute dependence on a single authority. Without trust in the platform, no transaction can proceed. Blockchain fundamentally solves this. In a decentralized network, participants don’t need to trust each other. Control and authority are distributed, minimizing power concentration and manipulation.
In blockchain, trust is replaced by mathematical proofs and cryptographic guarantees. Every participant holds an identical copy of the distributed ledger. If someone attempts to tamper with data, it is rejected by the majority of the network.
This is ensured by a consensus mechanism. In centralized systems like TMON/WEMAKEPRICE, platforms could unilaterally declare, “This transaction is complete” or “This settlement is delayed.” On blockchain, a transaction is only validated if the network majority agrees.
New blocks are added in a linear, chronological order. Once a block is added, previous ones cannot be changed. This immutability prevents manipulation or deletion of past records, such as retroactively altering settlement data—something that became a concern during the crisis.
Decentralization also eliminates single points of failure. In traditional systems, if a central server crashes or managers make poor decisions, the entire ecosystem collapses. Blockchain networks, however, are distributed across thousands of nodes. Even if some nodes fail, the system continues to function.
Blockchain has been described as a new internet layer that enables secure, peer-to-peer, trustless value exchange without intermediaries. This principle of "trustless" transactions—where parties don't need to trust each other—makes blockchain ideal for future e-commerce.
2.3. Real-Time Transparency and Immutability
One of the biggest issues in the TMON/WEMAKEPRICE case was information asymmetry. Sellers didn’t know where their settlement funds were, when they would be paid, or what status they were in. Blockchain solves this by ensuring transparency through a public ledger.
Blockchain’s transparency is selective and real-time. Every transaction is recorded, but personal information is encrypted. Sellers can see the real-time status of their own transactions and expected settlement dates, while others cannot access that data. It offers a balance between transparency and privacy.
All operations are transparent because related transactions are accessible to network participants. This means every stage of the settlement process is trackable—when a payment was made, when it was escrowed, when shipping started, and when it’s due to be released.
Immutability complements transparency, enabling powerful auditing capabilities. Since data cannot be changed after being added to the blockchain, auditing doesn’t require external validation or third-party reviewers. This minimizes human error, fraud, and compliance costs.
In real-world e-commerce, this equates to perfect traceability. In case of disputes, every step of the transaction is verifiable. Unlike in the TMON/WEMAKEPRICE case—where controversy arose over whether or not payments were made—such ambiguity is eliminated.
Moreover, blockchain’s secure, encrypted data transfer allows trustless collaboration between multiple parties in the ecosystem—sellers, buyers, logistics providers, financial institutions, and more—without needing to trust one another.
2.4. Cost Reduction by Eliminating Intermediaries
Traditional escrow involves multiple intermediaries—payment processors, escrow companies, banks—each charging fees and adding processing delays. For instance, in a $250,000 real estate transaction, escrow services may cost $2,500–$5,000.
Blockchain escrow removes most intermediaries. Smart contracts perform escrow functions automatically, eliminating the need for third-party services or complex financial workflows.
Instead of multiple service fees, blockchain escrow typically incurs only minimal network fees, making it ideal for small-scale transactions. Traditional escrow is inefficient for low-value trades due to flat fees, but blockchain scales efficiently regardless of transaction size.
Processing speed is also significantly improved. Traditional escrow is hindered by bank hours, holidays, and cross-border friction. Blockchain operates 24/7/365, with settlements triggered instantly when conditions are met. A 70-day settlement period, like that of TMON/WEMAKEPRICE, becomes impossible.
Crypto-based escrow offers financial inclusion to users without access to banking services. This opens new possibilities for global e-commerce, enabling borderless transactions without foreign exchange or remittance hurdles.
Another aspect of cost reduction is regulatory compliance. Blockchain’s transparency and immutability provide built-in audit trails, reducing the need for costly compliance systems. This significantly lowers the barrier to entry for small and medium e-commerce platforms.
3. The Future Scenarios Shaped by Blockchain Escrow
3.1. Real-Time Automated Settlement Systems
The most transformative aspect of blockchain escrow is its ability to enable real-time automated settlement. As seen in TMON/WEMAKEPRICE’s 70-day settlement cycles, traditional systems leave payment timelines at the discretion of the platform. In contrast, blockchain escrow triggers automatic settlement the moment conditions are met.
Smart contracts automatically execute when predefined conditions are fulfilled. For example, in an online store, when a buyer clicks “confirm receipt,” the smart contract instantly sends payment to the seller. No additional approvals or manual reviews are needed.
This real-time settlement is a game changer for small businesses. Many small merchants suffer from cash flow shortages. Immediate access to revenue improves liquidity and greatly enhances business stability. It enables timely payments for raw materials, salaries, rent, and other fixed costs—minimizing the risk of cascading bankruptcies.
Even more powerful is milestone-based conditional settlement. For large projects or custom-made products, partial payments can be released in stages. For instance, a web design contract might release 30% at proposal approval, 40% at design completion, and 30% upon final delivery.
This structure gives sellers stable cash flow and gives buyers control over project progress. In international trade, this model guarantees security and fairness—a Korean seller could be paid in KRW instantly upon delivery confirmation, even when selling to a U.S. buyer.
3.2. Multi-Party Transaction Innovation via Conditional Automation
The concept of milestone-based payments naturally evolves into multi-party transaction automation. In the future, blockchain escrow won’t be limited to buyer-seller transactions—it will manage complex contracts involving sellers, buyers, logistics providers, insurers, and more, all in a single smart contract.
For example, consider an online refrigerator purchase:
- Step 1: Once the seller confirms shipment, the logistics company automatically receives the delivery fee.
- Step 2: Upon GPS-verified delivery confirmation by the courier, the seller receives payment.
- Step 3: If no complaint is raised within seven days, the transaction is finalized.
This structure supports even more sophisticated automation. For refrigerated items, the truck’s temperature sensors could be tied to the contract. If proper temperature is maintained, settlement proceeds. If not, insurance is triggered—providing a refund to the buyer and a claim payout to the seller. Similarly, third-party inspection services can be integrated to verify authenticity or condition for luxury goods or used vehicles before payment is released.
Returns and exchanges can also be completely automated. When a buyer ships a return, and the seller confirms receipt, the refund is issued immediately—removing all delays and dispute risks. This capability expands naturally to more complex business models.
3.3. From Complex Deals to a Global Ecosystem
As multi-party automation evolves, blockchain escrow will manage entire complex ecosystems. In crowdfunding, for instance, current platforms collect funds up front, regardless of project success. But with blockchain-based escrow, creators receive funds only if the funding goal is met. If it fails, all backers are automatically refunded.
More advanced forms offer milestone-based fund release. A game development project might receive 20% upon planning completion, 30% for alpha release, 30% for beta testing, and 20% upon launch. Each stage may require backer votes or third-party verification before funds are unlocked.
This expands naturally to traditional industries like real estate and supply chain finance. In real estate:
- Contract deposit
- Loan disbursement
- Balance payment
- Ownership registration
- Commission payment
…can all be executed automatically as conditions are met.
In supply chains, a smart contract can coordinate payments from major corporations to small suppliers—managing the flow of funds from raw material providers to final manufacturers—solving cash flow problems across the supply chain.
Such complex deal automation ultimately leads to cross-chain ecosystems. The future of blockchain escrow goes beyond single chains. For example:
- A Korean seller lists a product priced in Ethereum-based stablecoins,
- A Japanese buyer pays in Bitcoin,
- A U.S. logistics company receives fees on Polygon.
All in a single smart contract. This is the next evolution of global e-commerce.
3.4. AI-Powered Escrow Ecosystems
Alongside cross-chain advances, we’ll see the rise of AI-powered escrow systems with:
- Automatic exchange rates and hedging
- Automated compliance with local regulations
- Decentralized credit scoring
These systems will analyze transaction history, market trends, and seasonal patterns to predict deal success and optimize contract terms in real time.
For example, AI might evaluate a seller’s history and current market risks to determine appropriate deposit ratios or prepayment rates. It could also auto-execute forex hedging strategies and monitor regulatory changes—automatically updating smart contract terms to remain compliant.
Global transaction data stored on-chain would power real-time credit scoring. High-trust sellers could receive partial prepayment, while lower-rated ones would undergo more thorough verification—all dynamically set by AI.
As machine learning continues, these systems will become increasingly efficient and precise, delivering maximum security, minimal cost, and ideal user experience—creating the next-generation escrow ecosystem.
4. WaaS as the Core Infrastructure for Blockchain Escrow
4.1. Fully Abstracting Blockchain Complexity
While blockchain escrow is gaining attention as a solution in the aftermath of the TMON/WEMAKEPRICE incident, its biggest real-world barrier is technical complexity. Concepts like private keys, seed phrases, and gas fees are extremely difficult for ordinary users to understand and manage. This is where WaaS (Wallet-as-a-Service) emerges as a game-changing infrastructure.
WaaS completely hides the underlying complexity of blockchain. Users can simply sign in with an email or social media account, and a blockchain wallet is automatically generated behind the scenes. All technical operations are handled in the background—just as we use web browsers without needing to understand TCP/IP protocols, users can enjoy blockchain benefits without knowing how it works.
This kind of invisible experience is the key to onboarding blockchain escrow into e-commerce. Customers can shop just like they always have, while a blockchain-based escrow system ensures security and transparency behind the scenes. One click to pay—and a smart contract is automatically activated. Once delivery is confirmed, funds are released without any user intervention.
Another core feature of WaaS is multi-chain support and cross-chain compatibility. Through a unified interface, users can interact with Ethereum, Polygon, Solana, and more—without needing to know which chain is being used. This eliminates technical barriers and is essential for widespread blockchain adoption.
WaaS also solves the gas fee problem through account abstraction. Users don’t have to pay gas fees themselves—platforms or sellers can cover them, or the system can automatically convert tokens to settle fees. This enables blockchain-level security and transparency with traditional user experience.
4.2. Seamless Integration with Existing Payment Systems
WaaS’s true value lies in its ability to seamlessly integrate with existing financial infrastructure. For blockchain escrow to be practical, it must naturally connect to credit cards, bank transfers, and mobile payments. WaaS acts as the bridge between legacy systems and Web3.
Customers can continue using familiar payment methods, while WaaS automatically converts them into crypto assets like stablecoins behind the scenes. For example, a credit card payment of KRW 100,000 could be automatically converted into 100 USDC and deposited into a smart contract escrow. Upon delivery confirmation, it’s reconverted to Korean won and released to the seller.
This hybrid approach delivers the convenience of traditional systems with the transparency and security of blockchain. Real-time exchange rates and automated hedging features also help minimize currency risk, enabling stable and safe global transactions.
WaaS also features an API-based modular architecture, allowing e-commerce platforms to integrate blockchain escrow without overhauling their systems. Even platforms like TMON or WEMAKEPRICE can transition to trustworthy escrow models without rebuilding from scratch.
Just as crucial is WaaS’s support for automated compliance. It’s built to handle KYC/AML, anti-money laundering laws, and privacy regulations across multiple jurisdictions. This means e-commerce providers can implement blockchain escrow without legal or regulatory uncertainty.
4.3. Delivering a User-Friendly Transaction Experience
What truly sets WaaS apart is the radically improved user experience, which removes the greatest barrier to blockchain adoption: poor usability.
Features like social login and biometric authentication eliminate the need to manage private keys or seed phrases. Users can log in with Google, Facebook, or KakaoTalk, or authenticate via fingerprint or facial recognition—offering convenience equivalent to mobile apps. At the same time, security is even stronger thanks to multi-signature and MPC (Multi-Party Computation) technology.
White-labeling and custom branding further enhance adoption. Platforms can fully customize the wallet interface to match their brand identity, so users feel as if it’s a built-in function—increasing trust and customer loyalty.
With gasless transactions and batch processing, users never need to worry about fees. Platforms can cover fees or bundle transactions to minimize costs. Predictive UX features help by providing clear estimates on transaction completion and settlement timing—alleviating customer anxiety.
Multi-language support and localization allow WaaS to provide a seamless experience globally. Local currencies, payment norms, and regulatory environments are automatically adapted to, enabling consistent service across borders. This makes WaaS a key driver of global blockchain escrow adoption.
Ultimately, WaaS offers the perfect balance between blockchain’s benefits and traditional UX, making blockchain escrow not just a tech experiment but a practical solution for mainstream e-commerce.
5. Conclusion and Outlook
5.1. Expected Benefits of Blockchain Escrow Adoption
The shockwave caused by the TMON/WEMAKEPRICE crisis raised fundamental questions—not just about specific companies but about the trustworthiness of the entire e-commerce ecosystem. The introduction of blockchain escrow provides a tangible solution to this trust crisis, paving the way for a much safer and more transparent digital transaction environment.
The most immediate benefit is a revolutionary improvement in settlement transparency. Sellers currently suffer from anxiety due to unpredictable settlement schedules and opaque processes. In blockchain escrow, every transaction is trackable in real time, and settlement conditions are hardcoded into smart contracts—eliminating arbitrary changes. This maximizes sellers’ ability to predict cash flow, enabling stable business operations.
This transparency naturally leads to a dramatic increase in consumer trust. After the TMON/WEMAKEPRICE scandal, many consumers became wary of e-commerce platforms. Blockchain escrow solves this technically—buyers know their payments are safely held in escrow and automatically refunded if a product isn’t delivered, creating a shopping environment where consumers can feel secure.
Beyond this, blockchain brings radical transparency to entire supply chains. From manufacturers to logistics providers, all transaction data can be recorded on-chain. This enables tracking from product origin to end-user, improving anti-counterfeiting measures, product quality assurance, and recall response. At the same time, financial costs drop significantly—fees from multiple intermediaries are eliminated through automation, and international remittance and foreign exchange expenses are also drastically reduced.
5.2. Remaining Challenges and the Path Forward
Despite the promising future, some challenges must be addressed for full-scale adoption of blockchain escrow. The most urgent issue is regulatory clarity. With varying and ambiguous crypto regulations across countries, delivering a consistent global e-commerce experience is difficult. Governments, regulators, and industry players must collaborate to establish clear and unified regulatory frameworks.
On the technical side, scalability and cost-efficiency need ongoing improvement. Current blockchain networks struggle with high transaction volumes, and network congestion can lead to soaring gas fees. Fortunately, technologies like Layer 2 solutions, sharding, and new consensus algorithms continue to evolve, and with advances in WaaS, these limitations are gradually being resolved.
Interoperability and standardization are also key, closely linked to WaaS development. Many blockchain escrow solutions currently operate on isolated systems. But as WaaS platforms expand with multi-chain compatibility, shared standards and protocols are beginning to emerge organically across the industry.
Another concern is smart contract security and dispute resolution. Smart contract bugs and edge cases must be addressed with robust risk management systems. For complex disputes that can’t be fully automated, decentralized arbitration mechanisms and legal frameworks need to be established.
5.3. A Paradigm Shift for the E-commerce Industry
As these technological and regulatory developments converge, the e-commerce industry is undergoing a fundamental structural shift—from centralized platforms to decentralized ecosystems.
The role of the platform itself is being redefined. In the past, platforms controlled every aspect of the transaction. In the future, they will act more like infrastructure providers, offering interfaces and services while blockchain guarantees the safety of direct transactions between buyers and sellers. This creates an environment where crises like the TMON/WEMAKEPRICE case cannot structurally occur.
This transition will also revolutionize the fee structure. Today’s high platform fees will be drastically reduced, replaced by value-based pricing models—fees tied to the actual value of services provided. This significantly lowers the financial burden on sellers.
Another radical shift will occur in data ownership. Currently, platforms monopolize all transaction data. Blockchain systems give users ownership and control over their own data, improving privacy and enabling users to leverage their data for better service and personalization.
Ultimately, this will lead to new business models that combine token economies and decentralized governance. Community-driven marketplaces, DAO-powered cooperative platforms, and other innovative formats will emerge, allowing participants to share in the growth and success of the ecosystem—a fairer model for all stakeholders.
At the heart of all these changes lies a revolution in trust. As the TMON/WEMAKEPRICE incident revealed, the traditional trust model depends on individual or corporate integrity—a fragile foundation. Blockchain escrow, powered by WaaS, replaces this with cryptographic and mathematical guarantees, offering a new trust paradigm for the digital age.
The journey toward a more transparent, fair, and efficient digital transaction ecosystem has already begun. While the TMON/WEMAKEPRICE crisis was a painful lesson, it also presented a rare opportunity to build something better. The development of blockchain escrow and WaaS technologies is turning that opportunity into reality—proving that a future where all participants trade fairly with equal access to information is no longer just a vision, but an imminent reality.
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