Crypto Platform Zipmex Files for Bankruptcy
Singapore-based cryptocurrency exchange Zipmex is the newest casualty from the major decline in Bitcoin and cryptocurrency prices. The exchange said that it had filed for bankruptcy protection in Singapore but the platform services a number of other countries like Thailand, Indonesia, and Australia as well.
Zipmex claimed it was attempting to handle its $53 million exposure to cryptocurrency lenders Babel Finance and Celsius when it resumed withdrawals last week, a day after it had suspended them on July 20th.
Following Zipmex's temporary suspension of withdrawals, Thailand's Securities and Exchange Commission declared on July 25th that it was collaborating with law enforcement to investigate any potential damages suffered by the general public.
Later on, the cryptocurrency exchange revealed that five applications for moratoriums to stop legal actions against Zipmex, for up to six months, were filed on July 22nd by Zipmex's attorneys. According to Singaporean law, such a filing gives businesses a 30-day automatic moratorium, or until a Singapore Court rules on the case, whichever comes first.
Zipmex also reported that their NFT platform, Trade Wallet, and other products are operating normally and the company will continue to ensure that customers do not experience any service interruptions. The filing and resulting moratorium are an effort by the exchange to address customer concerns about liquidity.
In order to ensure future operations, Zipmex is attempting to develop a reorganization strategy and obtain further financing to operate at full capacity.
The company stated on July 23rd that Zipmax is receiving interest for a memorandum of agreement (MOU) otherwise known as potential investors or buyers willing to provide capital for the company.
On July 28th, it was reported that Zipmex was able to successfully finalize their second MOU this past week on the heels of their first one from July 24th. Investors and customers eagerly wait for Zipmex’s reorganization plan to be finalized.
Zipmex is the most recent in a string of cryptocurrency players to experience problems as a result of the heavy market sell-off that began in May along with the collapse of two linked cryptocurrencies, LUNA and TerraUSD.
The failure of cryptocurrency fund Three Arrows Capital has also rattled Singapore's ambitious Bitcoin and cryptocurrency industry, which is by some estimations the largest in the Asia-Pacific region. It is likely that more developments from these affected entities will continue to play out as the market settles.