Bailout of crypto exchange Zipmex falters
Last payment for working capital lost, but Thai unit still has cash to meet salaries
Vehicles drive past a billboard promoting the Zipmex app last February. (Bangkok Post File Photo)
The rescue plan for embattled regional crypto exchange Zipmex is beginning to struggle after the company failed to receive the final payment under a US$100 million venture capital buyout.
The $1.25 million payment was due March 23 to fund working capital, according to a letter seen by Bloomberg News. Zipmex said in the letter that it would have to start liquidation proceedings for one unit, Zipmex Technology Co, and suspend that division’s wages unless it gets the money.
Zipmex is acquired for around USD 100 million by V Ventures, a subsidiary of the SET-listed shipping company Thoresen Thai Agencies Plc. The letter said Zipmex has received three tranches of funding. The crypto exchange has been restructuring after falling victim to last year’s virtual coin bear market.
Zipmex units in Thailand, Singapore and Indonesia currently have the necessary cash to pay salaries, according to the letter. Zipmex has not received a definitive indication of “when and if” the final payment will be made and said it is working with its advisers on next steps.
Zipmex declined to comment as it was “bound by confidentiality,” said Marcus Lim, CEO in an emailed response seeking comment. V Ventures did not immediately respond to a request for comment.
The Thai Securities and Exchange Commission sad in January that it was investigating whether Zipmex broke local rules in its offering of certain digital assets.
The SEC in December warned investors to carefully review individual deals proposed by Zipmex before deciding to enter into deals with the company.
Zipmex stopped withdrawals on July 20 last year and later received insolvency protection from the Singaporean government, but investors could no longer access their funds.
Zipmex Thailand, a unit of Singapore-based Zipmex Asia Pte, came under investigation last year after Babel Finance, a Hong Kong-based crypto lender, was found to have lost approximately $280 million worth of Bitcoin and other tokens through botched proprietary trading with clients . ‘ assets.
Zipmex had hired Babel Finance to operate and manage the investments.
The issue affected withdrawals from the Bangkok-based exchange’s ZipUp and ZipUp+ programs, which allowed clients to earn money from tokens.
