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Zeniex of South Korea Shuts Down as Government Takes Severe Actions on Unauthorized Crypto Exchanges

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On Nov 9th, the South Korean Crypto Currency Exchange Zeniex published a notice on its website about the termination of Zeniex's services as a result of the recent clampdown by the South Korean Government on unauthorized crypto exchanges.

It is to be noted that Zeniex Crypto Exchange started this May as a joint project between two the countries, South Korea and China. However, the exchange is closing because of "recent issues" which has made it difficult to operate. All the cryptocurrency trading-related services were already stopped on Nov 9 and the remaining operations will be stopped on Nov 23rd. The company also requested all its customers to withdraw all of their crypto assets as soon as possible from the exchange before the deadline of Nov 23rd.

The press release quotes "We believe that ZXG Crypto fund No 1. will have difficulties to operate smoothly with such current pressure from the financial authorities."

In another announcement on the same day, Zeniex announced the termination of ZXG Crypto Fund No.1 token which is under the investigation of local regulatory authorities. The ZXG token has also been affected by the exchange's decision. Initially, the company had planned to list ZXG on international exchanges but those plans have now been cancelled. The press release quotes "We believe that ZXG Crypto fund No 1. will have difficulties to operate smoothly with such current pressure from the financial authorities."
On Nov 12th, the joint project members, Zeniex and its Chinese partners, Genesis Capital plans to return ETH equivalent to ZXG tokens to its investors. The South Korean government body, Financial Services Commission (FSC) already warned the investors last October to not invest in any unauthorized crypto exchanges and Initial Coin Offerings (ICO) as they can't protect the investors from risks.

It is to be noted that South Korea's local financial newspaper, Business Korea already notified the investors by highlighting that the ZXG token did not adhere to any of the regulations of Financial Supervisory Service (FSS) and had never been registered under the FSS which is one of the most important prerequisites for any token to operate in the country according to South Korea's Capital Market Act.
One of Zeniex's representatives told South Korea's Maeil Business Newspaper that the company is not legally required to register under the FSS as it had raised only $884,500 in total which is less than the requirement of 1 billion won.

One of Zeniex's representatives told South Korea's Maeil Business Newspaper that the company is not legally required to register under the FSS as it had raised only $884,500 in total which is less than the requirement of 1 billion won.

From the beginning of this year, there were rumors that South Korea was planning to ban crypto, but later the government decided to impose some strict regulations. The local lawyers played a major role in lobbying the government to develop a clear legal framework. The following are a few major actions taken by the South Korean government till now to control crypto-related activities:
-Banning anonymous trading
-Forbidding minors and government officials from trading
-Taxing exchanges heavily

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