Cryptocurrencies are very popular in the Asian sector, it can be said that they basically became popular thanks to the Asian sector. Chinese, Japanese and Korean users have been a lot more accustomed to cryptocurrencies than Europeans, because of the roots. However, this doesn’t mean that these Asian countries don’t have very strict regulations about them.
Although it is hard to top China’s crypto regulations, Korea is rapidly heading towards it, as it is not pulling its punches on the crackdown it is conducting countrywide.
The most recent victim of the government’s strict regulations was Zeniex, which is a small Korean crypto exchange. According to La Tarde Zeniex was the first to open Korea’s very own cryptocurrency investment fund. Unfortunately, however, the exchange is now closing down, because of the regulations, they just can’t handle all the pressure.
There should be no hard feelings about the exchange, it was relatively young, only just opening on May 2018. Despite their age, the company was able to handle $410,000 worth of transactions in the last 24 hours. Transparency was one of the talking points of the customers, as the company didn’t disclose information about their team, only featuring their address in Seoul.
According to reports the company’s primary reason for shutting down was the difficulty to operate within the restricting legal framework of the country, however, many speculate that it was just about profits, speculating that the company couldn’t perform well based on their merit and not the regulations. Zeniex has even come out with an official apology to their users.
The Government’s firm grip
Zeniex didn’t attract any attention from the country’s financial watchdogs as it didn’t really show much promise in volume. Even though the watchdog’s remained dormant for some time, what did attract their attention, in the end, was the crypto investment fund that Zeniex launched called Zxg Crypto Fund No.1. Apparently, it was the first of its kind for Korea. However, being first wasn’t the reason the FSC (Financial Services Commission) and the FSS (Financial Supervisory Service) took it to the extreme. The reason was that the whole ordeal was not approved by them, ultimately putting the project against the law.
In Zeniex’s defense, their project was rumored to have gathered up to 1,000 Ethereum roughly $212,0000 in September. Thanks to the number the company was able to justify their silence by saying that the amount wasn’s significant enough to report it to the authorities.
Because of such a mistake or in some cases “pressure from the government”, the company decided to completely stop its operations. In their words, they wholeheartedly regret that this needs to take place and pledge to return all purchased tokens to their customers.