South Korean Exchange Zeniex Closes Operations Amidst Government Crackdown
Zeniex, South Korea’s crypto exchange has been instructed to take actions to terminate its services as per the government’s directive against unauthorised platforms. This was revealed by a firm on Friday, 9th November, in a post. Zeneix had been opened as a result of a mutual dialogue between China and South Korea, in May 2018, but due to “recent issues,” they have reached a conclusion “that continuing to operate such a service will be difficult.”
The trading of cryptocurrencies on the exchange was stopped, effective immediately, while the rest of the services will be terminated on November, 23rd, and all the customers have been asked to withdraw all their cryptocurrencies, before the mentioned deadline.
The Zeinex cryptocurrency fund Zxg Crypto Fund No. 1, will also close by November, and in their press release, they said,
“We believe that ZXG Crypto fund No 1. will have difficulties to operate smoothly with such current pressure from the financial authorities.”
Zeniex and its Chinese partner, Genesis Capital, will return the fund that they had invested in Ethereum (ETH) on Monday, Nov.12.
South Korea’s Financial Services Commission (FSC) in the previous month had given out a warning against unauthorised crypto exchanges, and Initial Coin Offerings, due to their lack of sanction. They had specially mentioned Zxg Crypto Fund No. 1, saying that they had never been registered by the Financial Supervisory Service, as per the requirements of South Korea’s Capital Market Act.
However, a representative from the company in question told Maeil Business Newspaper, South Korea’s major daily, that the company was not under any obligation to register as it had managed to raise 884,500 USD, which is less than the 1 billion dollar mark, in which case it would have been mandatory for them to register. To this, the FSC responded. However, the FSC started the investigation against the company, citing a lack of ability to check whether the platform is operating as claimed.