South Korean Crypto Exchange Zeniex Shuts Down Amidst Crackdowns

Zeniex, a Korean crypto exchange that has only been in operation for six months, notified the public that it was shutting down its official website on November 9 and has stopped ZXG token trading services.

In Zeniex’s official statement regarding the recent issuance of ZXG tokens, the company has decided to terminate all services on November 23, 2018. In addition to ZXG tokens, any assets held by investors in Zeniex must also be taken out by the termination date. The company apologized for failing to meet user expectations.

The notice also stated that the company had considered continuing operation of the “ZXG Cryptographic Fund No. 1” by having it listed on the market, that is, the ZXG token to be listed on other overseas exchanges in order to continue its operation. However, it was determined that it would be difficult to operate smoothly under the pressure of the financial authorities. Zeniex decided to revoke it and liquidate the ZXG token held by the investor today (12th) to return the Ethereum (ETH). The cost is shared by Zeniex and Genesis Capital.

Zeniex opened in May 2018 and was established by experts from China and Korea. In October, the Korea Financial Services Commission (FSC) and the Korea Financial Supervisory Services (FSS) announced that they would speed up investigations into local cryptocurrency funds and related companies, including Zeniex, referring to its unregistered, management and sales, and even having the trustee not been approved by the FSC. The Zeniex representative has responded to the local media. As a result of overseas token issuance, the fundraising finance is less than 1 billion won. It should be exempted from the Capital Markets Act and no registration is required.

According to the Capital Markets Act, all funds must be registered with the FSS, and funds raised to general investors must also submit a securities report. FSC and FSS have stated that cryptocurrency funds may violate the Capital Markets Act and alert investors to be cautious.