The Southeast Asian cryptocurrency exchange Zipmex has filed for bankruptcy protection in Singapore, becoming the latest victim of the market downturn in digital assets.
Zipmex resumed withdrawals last week, just a day after suspending them on July 20, and said it was working to address its $53 million exposure to crypto lenders Celsius and Babel Finance. It appears that Zipmex’s fortunes took a turn for the worst after the collapse of the Hong Kong-based crypto lender Babel Finance. Reuters reported that Zipmex’s solicitors submitted five applications on July 22 seeking moratoriums to stop legal proceedings against Zipmex for up to six months. According to Singapore law, filing such applications grants companies an automatic moratorium for 30 days, or until such time that a Singapore court makes a decision regarding the application, whichever of the two is earlier. Zipmex operates in Singapore, Indonesia, Thailand, and Australia and is the latest in a long line of crypto players to fall into great difficulty following a sharp decline in global crypto markets. The announcement that the firm is seeking moratoriums comes just a week after its CEO and co-founder Marcus Lim publicly denied the firm was experiencing financial troubles. Rumours have been touted for the past months that the exchange was insolvent after a proposed acquisition by Coinbase fell through.
According to Zipmex,
The moratoriums would give the Zipmex Group the breathing space and time it requires to explore options to resolve the liquidity situation (including to pursue the recovery against Babel Finance), and to formulate a restructuring plan and secure additional investment to secure the Zipmex Group’s operations moving forward.
Zipmex claims that it is in the advanced stages of securing new investments to relive its liquidity crisis and Thailand’s Securities and Exchange Commission is asking affected investors to register complaints against the exchange on its official site.
It should be noted that Zipmex has only submitted moratorium applications, and is not in bankruptcy procedures.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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