South Korean Crypto Exchange Zeniex To Terminate Services Amid Regulatory Pressure

Announcements, News, Regulation | November 12, 2018 By:

South Korean cryptocurrency exchange Zeniex is shutting down due to the government’s crackdown on unauthorized crypto platforms.

Launched in May of this year, Zeniex is a joint project by South Korea and China. It is designed as a comprehensive financial platform that offers services for people in the business of virtual money and other financial markets. In September, the exchange launched South Korea’s first cryptocurrency investment fund – ZXG Crypto Fund No. 1 (ZXG).

On Friday, Zeniex announced that all of its services will be terminated on November 23 due to recent issues regarding ZXG, which was intended to be listed on overseas exchanges in order to continue managing the fund.

The move came after the South Korean government said that ZXG has never been registered with the Financial Supervisory Service (FSS), and none of the management company, sales company and the trustee have been approved by the Financial Services Commission (FSC).

“With recent developing issues we believe that ZXG Crypto fund No 1. is and will have difficulties to operate smoothly with such current pressure from the financial authorities,” the company said. “As such we feel heavy responsibility and have come to this unfortunate decision. It is with much regret to announce that all services of Zeniex will be terminated on November 23, 2018.”

According to the announcement, the exchange and its partner, Genesis Capital, will return investors’ funds in ethereum on November 12. The company also urged users to withdraw their crypto assets before November 23.

Last month, the FSC warned investors against unauthorized crypto exchanges and initial coin offerings (ICO) since they do not safeguard investors against risks. Under the Korean Capital Markets Act, public offering funds that collect funds from general investors must file securities reports,” and “an asset management company that manages a fund and the fund sales company that sells it have to obtain necessary financial approval.”