In 2020, to celebrate the launch of Shining Nikki in South Korea, Paper Games released a series of in-game wardrobe items based on the hanbok, a traditional Korean dress. This led to complaints from Chinese players, who objected to the hanbok being treated as a traditional Korean item and claimed that it was actually rooted in Chinese culture. On November 4, Paper Games released a statement supporting the argument that the hanbok was not Korean, and that "as a Chinese company, we want to reiterate that our stance is always consistent with our country China." They also announced that any accounts spreading misinformation about China or trying to insult the country would be blocked, implying that arguing that the hanbok was Korean counted as an offense. The hanbok items were ultimately removed from the game a day later.

This caused backlash from Korean players, who retaliated by deleting the game and applying for refunds for in-app purchases. On November 6, the game was delisted from Korean stores, resulting in demands that Paper Games be investigated for stealing Korea's cultural heritage and closing the service without offering compensation. This got to the point where Lee Sang-heon, a Democratic Party lawmaker from South Korea's National Assembly, called out Paper Games for siding with false claims from Chinese netizens and directing criticism towards Korean users. He also warned that their actions had violated South Korea's fair trade rules as they did not offer refunds and compensations prior to pulling the game from the country.