Bitcoin Bear Market Claims Another Crypto Firm Like Zipmex Files For Bankruptcy
by James · July 28, 2022
Thailand-based cryptocurrency exchange Zipmex is seeking bankruptcy protection against legal action from creditors, according to an update from the company on Wednesday.
The company, which frozen user outlets last week filed moratorium applications on July 22 in Singapore for its various units. These are Zipmex Asia Pte Ltd, Zipmex Pte Ltd, Zipmex Company Limited, PT Zipmex Exchange Indonesia, and Zipmex Australia Pty Ltd.
Under the nation’s laws, the move will automatically grant Zipmex protection from continuing or commencing proceedings by claimants for 30 days, or until a Singapore court makes a decision on the applications – whichever comes first.
“This helps protect Zipmex from third party actions, claims and lawsuits while it is active[…] without having to worry about defending potential claims or adverse actions while we do it,” the company explained in a statement.
After initially halting all trading and withdrawals on its exchange on July 20, Zipmex has since resumed some activity on the platform. The company noted yesterday that its trade wallet and NFT the platform, for example, is now fully operational and no further interruptions in these products are planned. However, withdrawal from Z walletswhich are the main wallets in which customer funds are stored at Zipmex, remain frozen.
The company’s troubles come as a result of the fallout from the “crypto contagion” following the collapse of Terra and crypto hedge fund Three Arrows Capital, combined with depressed crypto prices amid a deepening bear market. Since May, several crypto trading platforms have frozen user withdrawals, including CoinFLEX, Voyager Digital, Babel Financeand crypto loan company Celsius.
Three Arrows Capital, Voyagerand Celsius each has filed for bankruptcy.
Zipmex said when it first halted withdrawals that it had encountered financial problems with “key business partners”, which the company later revealed to be $48 million and $5 million exposure to Babel Finance and Celsius, respectively.
The company said yesterday that it plans to use the time allowed by bankruptcy protection to address its liquidity problems, create a restructuring plan and secure new investments to support operations going forward. The firm claims it has already received “formal, registered interest” from potential investors to strengthen their finances.
