South Korea’s cryptocurrency exchange platform Zeniex has succumbed to a government crackdown on unauthorized operators. The platform in an official announcement made on November 11 revealed plans to shut down all its operations on November 23.
Zeniex, in partnership with a Chinese entity, opened in May 2018. The firm became the first platform to offer a cryptocurrency investment fund, the ZXG Crypto Fund, in South Korea.
Unfortunately the crypto investment fund service ran into complications with regulators almost immediately. The offering attracted scrutiny from the FSC for allegedly failing to register with the Financial Supervisory Service as per the nation’s Capital Market Act.
Zeniex brushed off the accusation stating that the fund had not raised the targeted amount that warranted registration. The Cryptocurrency Investment fund is among the services slated for closure on Nov 23 according to the announcement.
“We believe that ZXG Crypto fund No 1. will have difficulties to operate smoothly with such current pressure from the financial authorities.”
However, all funds invested in ZXG will be refunded to investors by the end of today, Nov 12. On November 9, cryptos trading within the platform were stopped indefinitely ahead of the general termination of the platform’s operations.
The announcement cites tough operating conditions by the country’s financial regulators. South Korea has not been a big fan of cryptocurrencies and ICOs. In fact, like China the country banned Initial Coins offerings (ICOs) prompting several operators to ship operations overseas.
The announcement further advises users of the platform to withdraw all their outstanding cryptocurrencies balances before the deadline lapses as they will no longer access their accounts after the shutdown.
South Korea has been under pressure from lobby groups and a section of legislators to lift the ban on ICOs and instead enact regulations that would govern the industry. Recently, the Financial Service Commision (FSC), the nation’s financial watchdog revealed that it was going to announce the government’s stance on ICOs, a statement it is yet to act upon.