South Korea is a very interesting region when it comes to cryptocurrencies. In most cases, there is nothing but positive news first and foremost. At the same time, local regulators are looking for ways to ensure the industry gains more legitimacy. This has forced the first cryptocurrency fund in the country to shut down effective immediately.
A Major Setback in South Korea
Most cryptocurrency enthusiasts look at South Korea as a bastion of proactive regulation. There are some efforts underway to officially regulate Bitcoin and altcoins, but it seems there is no intent on banning this form of money whatsoever. That in itself is a good thing, although there are no permanent solutions in place just yet.
As this regulatory uncertainty remains in place, there will be some casualties along the way. For Zeniex, the regulatory pressure has gotten to the company in a major way. They operate an exchange, which remains unaffected for the time being. However, their cryptocurrency fund is closing down immediately. It is an unfortunate development, but something that can’t be helped either.
Although it is a bit unclear why their fund is being closed, the company is adamant about doing so. Their current approach has attracted a lot of attention by regulators, which may indicate their lack of transparency is a key point of contention. All existing users should be refunded if they still have outstanding balances, though no specifics were provided on this front.
For the time being, the Zeniex exchange will remain in operation. Government officials have no beef with the exchange or its activity itself, which further confirms there were genuine concerns over the fund itself. Being the first to come to market with a cryptocurrency fund gave Zeniex a competitive edge, but it seems they may have to revise that initial plan in the future.
The company itself is confident they did nothing to warrant such scrutiny. More specifically, the fund tried to raise 1,000 ETH to kick off this venture. While it is unclear if that attempt was successful, the total amount wouldn’t warrant reporting the activity to the authorities either. How this will pan out exactly, has yet to be determined. Cryptocurrency funds remain a somewhat controversial concept, even in South Korea.
It is expected this development will not necessarily affect cryptocurrency in South Korea whatsoever. Considering how there are so many exchanges still generating a hefty trading volume, there is no genuine reason for concern whatsoever. Even so, it seems unlikely any cryptocurrency fund will be set up in South Korea for the foreseeable future. That might hinder overall adoption a bit, luckily there are plenty of other ways to invest in Bitcoin and altcoins moving forward.
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Author: JP Buntinx