South Korean Crypto Exchange Shuts Down After 5 Months Due to Regulators

Zeniex, a five month old South Korean cryptocurrency exchange, made an announcement that the new firm will be closing doors on November 23, 2018. The exchange claims that the closure is due to issues with South Korean Financial Regulator.

The issues with the South Korean Financial Regulator seem to stem from the exchanges native token, ZXG token and its crypto fund.

According to a recent statement from Zeniex:

“with recent issues regarding ZXG, we have gone through great deliberation both internally and externally. As a result, we have come to the conclusion that continuing to operate such a service will be difficult.”

 While the company had been forthcoming with the news, it had already ceased trading of the ZXG token back on November 9, 2018. The company has also stated that they will refund its user base through Ethereum, which will also include investors in ZXG. They will commence with user withdrawals as normal until the close date.

As many government agencies around the world have become more vigilant with reporting suspicious crypto-based activity, it seems that Zeniex had created a virtual currency fund, named ZXG Crypto Fund 1, and had caught the eye of regulators. South Korea’s Financial Supervisory Service (FSS) and the Financial Services Commission (FSC) have issued a public warning regarding the ZXG Crypto Fund 1.

According to local sources,  Zeniex has failed to comply with local law, which requires the company to register the fund and to have its financial investment guide audited by the regulators. According to the regulatory framework over creating funds, ZXG Crypto Fund 1 violated South Korea’s Capital Markets Act.