Cryptocurrency exchange Zeniex has announced that it is terminating all services after South Korean financial regulators began cracking down on unauthorized cryptocurrency funds. The exchange requires its customers to withdraw their cryptocurrencies before the service ends.
Termination of service and cessation of fund transactions
Zeniex, which went live in May, announced the end of all services on Friday. A few days ago, South Korean financial institutions have launched an investigation into the exchange’s cryptocurrency fund Zxg Crypto Fund No. 1 (ZXG). Zeniex explained: Regarding ZXG's recent issues, we analyzed and discussed the internal and external situation and concluded that it would be difficult to continue operating and providing services. We regret to announce that ZENIEX will terminate all services on November 23, 2018.
The exchange then informed its users that “all crypto assets other than ZXG must be withdrawn before the service ceases,†while adding that after Nov. 23, users will not be able to inquire about the amount of crypto assets they hold on the exchange.
Additionally, the exchange also announced the termination of Zxg Crypto Fund No. 1, which ceased trading on November 9. According to the statement, Zeniex and its partner Genesis Capital will return investor funds in ETH on November 12.
Noting that the fund is "expected to be listed on overseas cryptocurrency exchanges." The exchange admitted: With the escalation of recent problems, we believe that ZXG CRYPTO FUND NO. 1 will struggle to operate smoothly under the current pressure from financial regulators.
Regulatory issues
Blockchain has reported that South Korean financial regulators are cracking down on unauthorized cryptocurrency funds.
The Korea Business Daily wrote that Zxg Crypto Fund No. 1, launched in September, was the focus of regulators because it was “South Korea’s first virtual currency fund.â€
The government believes the fund violated the country's Capital Markets Act and has launched an investigation into the fund and the company. Zeniex had originally planned to launch a second cryptocurrency fund, but scrapped plans following an investigation by regulators.
Newsis quoted the country's Financial Supervisory Service (FSC) as saying that the virtual currency fund may have violated the capital market law, and the company is not an investment company recognized by the Korean Financial Supervisory Service.
The Korea Business Daily noted that Zeniex’s fund was never registered with the Korea Financial Supervisory Service, and Zeniex’s affiliates had not been approved by the Korea Financial Supervisory Service.
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