Zeniex to Close Under Government Pressure

Korean cryptocurrency exchange Zeniex announced it will shut down on the 23rd of November this year. In addition to the exchange, ZXG token will also be discontinued. Holders of the tokens will have the value of their tokens returned to them in ETH.

The company claims that it would have difficulties “operating smoothly with such current pressure from the financial authorities.” Those pressures have been mounting for some time, especially since the FSC reaffirmed their stance against ICOs in Korea.

As recently as October 30th, the FSC and FSS in Korea announced that they would be ramping up their investigations of cryptocurrency funds and companies. ZXG was mentioned by name in their statement. Zeniex was never registered with the FSS and “none of the management company, sales company, nor the trustees have been approved by the Financial Services Commission.”

Officials from the FSS and FSC claim that Zeniex was in violation of capital markets law by not being properaly registered. A Zeniex representative stated in response that since token issuance occurred outside of Korea, and that less than $1M was raised, the company should be exempt from the reporting obligation stipulated in the capital market law.

To accommodate a smooth and transparent exit, the exchange has increased withdrawal limits to allow users to withdraw all of their holdings in a lump sum.

This advance closure comes on the heels of the Purebit exit scam which has been making waves recently. In the case of Purebit, nearly $3M was raised via ICO before the company shut down all of its chats and website, and left messages of “I’m sorry” and “thank you” across various social media.

Expect further closures to take place in the coming months as the Korean government begins to exercise its authority on the cryptocurrency industry.