During the National Day holiday, someone claiming to be a family member of an employee from Guangdong Inke Interactive Entertainment Network Information Co., Ltd. (referred to as "Guangdong Inke") posted on social media alleging that their spouse was sentenced for participating in a blind box project that violated laws while following leadership instructions at Inke. However, the poster quickly sent screenshots to reposting platforms requesting deletion: "Without my consent, it is prohibited to repost content I published. Please delete posts about Inke" — this employee family member's request was brief and direct, ending with a "clasped fist" emoji.
The post stirred up controversy. While outsiders were puzzled by the poster's contradictory behavior, representatives from INKEVERSE (Inke's parent company, 3700.HK) stated that the post content was "not true."
Although no Inke employees have been sentenced to date, company insiders mentioned that there are indeed employees currently on bail, with court hearings scheduled for next month. Bail is a colloquial term for release pending trial, a type of criminal coercive measure generally granted when crimes are relatively minor, social danger is low, or there are special physical conditions or procedural needs to prevent prolonged detention.
INKEVERSE representatives said that employee families posting complaints online might be due to the "excessively long" handling time of events related to the "blind box controversy," coinciding with the Mid-Autumn and National Day holidays, which affected family emotions. This case has not yet been judged, and the company was "caught in a dragnet" because "people think companies doing live streaming or social media make money easily." The company is also appealing, but as a corporation, fighting for rights is inherently a lengthy process. The company cannot constantly report progress to families, but will not abandon its employees.
This matter has dragged on for a year without resolution. As of the October 14 close, INKEVERSE shares closed at HK$1.1, down 5.17%, with a total market cap of HK$2.131 billion (approximately RMB 1.957 billion).
**Blind Box as Inke's Startup Project, "No Significant Revenue"**
Inke operated blind box businesses through different subsidiaries, such as "Hash Blind Box" launched by Hainan Kaiyin Network Technology Co., Ltd. ("Kaiyin"), and "Dingdang Magic Box" launched by Hainan Aike Network Technology Co., Ltd. ("Aike"). Currently, both apps can still be found in mobile app stores but display "The app developer is conducting internal optimization" and cannot be downloaded.
According to sources, "blind boxes" were a startup project Inke launched during the pandemic. The aforementioned INKEVERSE representative explained that many small and medium merchants in Guangzhou had unsold inventory from factories during that time. An Inke team working on online economy wanted to "stimulate" business through online blind box services, but many deliveries couldn't be sent out then, and customer service reported surging complaints from blind box operations.
The representative said, "E-commerce earns hard money, and Inke doesn't have this (e-commerce) DNA." During the special pandemic period, the company tried new businesses, including short dramas and overseas social media projects. "The boss gives startup projects a six-month evaluation period to see if the team can sustain itself." But with surging complaints from blind box business, they stopped operating it.
Corporate records show Kaiyin was established in January 2022, wholly owned by Beijing Melywood Network Technology Co., Ltd. ("Melywood"). Melywood was established in 2015 as an INKEVERSE member company.
In January 2025, third-party sources indicated that Kaiyin's Hash Blind Box attracted many young users with unique virtual collectible experiences, but "recently the Hash Blind Box app suddenly stopped operating, preventing many users from logging in," and causing many users to be unable to "retrieve remaining funds." Aike was established in October 2019, also wholly owned by Melywood. On September 28, 2022, Aike successfully registered the "Dingdang Magic Box" trademark. Aike was previously wholly owned by Inke Network Technology (Hainan) Co., Ltd. ("Inke Hainan"), with initial shareholding from January 2022, before Inke Hainan withdrew in October 2022.
As of October 14, consumer complaint platforms show 726 complaints containing "Hash Blind Box," with most users seeking refunds and compensation. One user complained about charging "6 transactions totaling 4,396.91 yuan for blind box draws, completed draws but didn't extract blind boxes, only remembered this in February 20, 2025, to find the app no longer opens."
Another user complained in April this year about purchasing Hash Blind Box products after seeing advertisements, claiming the product "induced consumption, and goods exchanged for points were inferior quality not matching actual value," with substantial points remaining but unable to access the platform account. Additionally, there are 4,420 complaints containing "Dingdang Magic Box." One user discovered in October last year that their nephew used their phone to purchase 2,800 yuan worth of products on Dingdang Magic Box. Customer service initially refused to handle the case citing "non-direct family relationship," while the payment platform told them to communicate directly. The user reported to Haikou Municipal Administration for Industry and Commerce on October 23 last year. This complaint currently shows "replied" rather than "completed."
Consumer complaints include "minor unauthorized consumption, failure to fulfill disclosure obligations" regarding Dingdang Magic Box. Regarding disputes from minor consumption, the aforementioned representative argued that the root problem is payment - how can minors consume without parents' passwords? If parents blame platforms for everything without managing their children, how much responsibility should platforms bear? They claimed many parents claim their children made purchases, but transaction records show it's "impossible for children to have made these purchases." Attorney Zhao Mao from Beijing Yuecheng Law Firm's Corporate and Investment Department believes this should follow the principle of "whoever claims bears the burden of proof."
Regarding blind boxes' awkward position, Attorney Zhao said, "I personally think blind boxes somewhat involve gambling elements. If it's actually gambling, it's completely impermissible. Currently, blind boxes exist in the gray area between gambling and lottery."
**Subsidiary in Controversy, INKEVERSE Previously Emphasized "Highly Valuing Employees"**
Currently, INKEVERSE has not released information related to its subsidiary's "blind box controversy." Attorney Zhao analyzed that Hong Kong stocks must follow Hong Kong Stock Exchange and local securities regulations for listed company disclosures. For instance, bankruptcy must be disclosed under mainland law, but whether a subsidiary's impact requires disclosure depends on specific circumstances and Hong Kong stock requirements. If the subsidiary's matter "truly involves criminal issues," it should be disclosed. Currently, information is insufficient for proper judgment.
In recent years, INKEVERSE continues actively expanding its business landscape. For example, INKEVERSE mentioned in its 2023 annual report that on March 26, 2024, the board approved a $100 million budget for purchasing cryptocurrencies. In its 2024 annual report, INKEVERSE disclosed that in emerging fields, the group continues to be optimistic about Web3.0 and blockchain industry development potential, beginning early positioning through cryptocurrency holdings in 2024, preparing for new industry entry. The company emphasized that besides optimizing existing main business product lines to continuously improve productivity, it will also dedicate efforts to building a more diversified business system with greater development potential.
INKEVERSE originally went public on the Hong Kong Stock Exchange as "Inke." In June 2022, it announced a proposed company name change, with July and August announcements regarding company name, logo, website changes, and stock symbol changes from Inke Interactive Entertainment Limited to INKEVERSE Group Limited. The board believed the name change "could provide the company with more appropriate corporate positioning and image" to better reflect the group's current business development and future direction.
In July 2018, INKEVERSE's post-hearing information pack showed most revenue came from live streaming business, where users could purchase virtual currency Inke diamonds and use them to buy virtual items or other value-added services on the platform. When hosts receive virtual items, the system automatically converts them to equivalent Inke coins deposited in hosts' platform accounts. Hosts can then choose to exchange accumulated Inke coins for RMB at exchange rates set by Inke.
Under basic revenue-sharing arrangements between the company and hosts, both parties share approximately 31% of total virtual item value received by hosts. The company also rewards hosts with additional Inke coins under reward policies, potentially resulting in higher actual revenue-sharing ratios. According to performance disclosed in the July 2018 post-hearing information pack, host costs accounted for approximately 55% of live streaming business revenue. Additionally, leveraging its "massive user base" and host popularity, the company also provides advertising services. Hosts and host agencies are its main supplier groups, but the company believes every user has potential to become a host, thus building a "large stable" host group, making the company not dependent on any specific host or agency. Inke's 2017 revenue was approximately RMB 3.942 billion.
By 2024, INKEVERSE's revenue was approximately RMB 6.851 billion, basically flat compared to 2023, but down RMB 2.325 billion from 2021's RMB 9.176 billion. In 2024, INKEVERSE's annual profit was approximately RMB 217 million. Notably, INKEVERSE's R&D expenditure reached RMB 389 million in 2022, the highest from 2020-2024, approximately RMB 184 million more than 2024. That year's revenue was approximately RMB 6.319 billion, but annual profit showed a loss of approximately RMB 169 million.
From R&D expenditure and personnel arrangements, INKEVERSE places high importance on research and development. As of December 31, 2024, INKEVERSE had 1,416 full-time employees, primarily located in China. Among them, 418 full-time employees were responsible for technology and R&D.
As of December 31, 2024, INKEVERSE's consolidated balance sheet showed net assets of approximately RMB 4.446 billion and total liabilities of approximately RMB 1.126 billion. INKEVERSE's asset-liability ratio is approximately 25.33%. In internet industries, particularly those involving entertainment and social media, many companies in rapid expansion phases typically have asset-liability ratios of 30%-50% or higher. The advantage of low debt ratio provides INKEVERSE with a risk-resistant buffer.
INKEVERSE's annual report shows that overall group development and operations are supervised by founder Feng Yousheng, who is primarily responsible for overall development strategy and business planning. Initially, most company revenue came from live streaming. In the 2024 annual report, INKEVERSE's main businesses include several additional notes: primarily engaged in mobile live streaming platform business in China, providing value-added telecommunications services, internet cultural services, online audiovisual program services, and performance economic services. Additionally, its main suppliers expanded from primarily hosts and host agencies to include online promotion service providers. Other suppliers mainly include payment channels and digital marketing, server hosting, and bandwidth leasing service providers. Last year, its largest supplier's procurement amount accounted for approximately 6.4% of total procurement, while the top five suppliers (all independent third parties) collectively accounted for approximately 11.4% of total procurement.
INKEVERSE's annual report states that as of December 31, 2024, the company "had no events or complaints that materially adversely affected its business, financial condition, or operating results during the reporting period." It emphasized that effective talent management "is the foundation for the group's successful long-term development," and the group "highly values employees," providing competitive salaries and benefits in regions where the company operates "to manage employee turnover."
Now with employee families and the company each holding different positions, the truth remains unclear, like an unopened "blind box." Facing external inquiries, INKEVERSE only states it is "continuously appealing." All contradictions and controversies may point to the expected court hearing in November. Whether the court can open this "blind box" will soon be revealed.