First Crypto Fund in South Korea Shuts Down Amid Government Crackdown

The South Korean government crackdown on cryptocurrencies causes a premature closure of country’s first cryptocurrency investment fund.

Seoul Tightening Cryptocurrency Regulations

The South Korean government is implementing very strict cryptocurrency regulation on local cryptocurrency businesses. This tight regulation forces Zeniex, a minor South Korean cryptocurrency exchange to close the country’s first cryptocurrency investment fund. The regulation atmosphere in the country follows a General government crackdown.

Zeniex was first established in May 2018 and according to its website handles more than $400,000 worth of transactions every 24 hours. The exchange has a physical address location in the capital Seoul although no members of its team are displayed on its website. This can be attributed to the stringent regulation and government crackdown on cryptocurrency in the country.

An official communication from Zeniex Stated that it is closing its doors and apologize for not meeting their customer demands.

We have come to the conclusion that continuing to operate such a service will be difficult. It adds: We sincerely apologize that we were unable to meet the expectation of our Zeniex users and supporters.

Zeniex Exchange Still Operational

However, the crackdown did no affect the Zeniex cryptocurrency exchange but solely targeted its cryptocurrency investment fund. The investment fund knows as Zxg Crypto Fund No.1 was probably the first of its kind in South Korea. Reports indicate the establishment of this fund was unauthorizing. The Financial Services Commision and the Financial Supervisory Service reportedly warned against the establishment of the Fund.

The Fund tries to raise about 1,000 ETH through an ICO in September, however, no information provides on whether the ICO was successful or not. The company, however, claims that the money raising was too insignificant to require them to report to the authorities.

According to information from the Fund’s website, two projects get lists which including multiVAC. MultiVAC is a next-generation public blockchain for large-scale and complex distributed applications. The blockchain runs o the Byzantine Consensus algorithm.

The other project lists on the site are Blockcloud which claims to raise over a million dollar in ICO recently. The Exchange revealed that it closed down the cryptocurrency fund because it would have difficulties to operate smoothly given the current regulation standpoint. However, the website reveals that the Closed crypto fund would return all purchased tokens to the original buyers.

Cryptocurrency investment funds, a replica of the traditional fiat currency investment funds are randomly popping up everywhere globally. Many countries, however, are suppressing their legal existence.

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Jacob Okonya

Jacob has been engaged in blockchain technologies, Bitcoin, and fintech. He worked mostly as a blockchain market researcher, fintech journalist, and online forum moderator. Jacob is involved in creating articles and educational content for different project components, explaining how users can utilize the various resources.

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