CEO of Crypto Exchange refuses to resign after $73 million loss

Crypto exchange Zipmex founder Marcus Lim has stated that he will continue to oversee the troubled firm unless its new shareholders ask him to step down.

In fact, shareholders and potential investors are calling for Lim to step down, blaming his management decisions for leading to a severe liquidity crunch, while Zipmex has been given a three-month reprieve to turn things around.

Last week, Singapore’s top magistrate granted Zipmex three months of creditor protection, giving the Australian-founded exchange extra time to raise between $50 million and $80 million in new capital.

The creditor protection will prevent Zimpex from being sued until 2 December this year. The company initially asked for a five-month postponement of reorganization.

The Crypto Exchange Boss has other things on his mind

During a recent interview with The Australian Financial Review, Lim claimed that he will remain in his position until all investors get their money back.

To achieve this goal, the CEO of Zipmex, who owns almost a quarter of the company, must seek to recruit new majority owners. He indicated that they are developing a strategy to repay the approximately 400,000 affected customers in full.

Image: The Crypto Times

Lim stated that he and co-founder Akalarp Yimilai will exit once this goal is reached, if investors still want to leave:

“Should this happen, my co-founder Akalarp [Yimwilai] and I have made it clear that we will work fully with them and their wishes if they seek a change of leadership.”

A key shareholder in the exchange issued Lim a letter asking for his resignation, citing a “loss of trust between partners” and the fallout from the Babel revelations, according to a Bloomberg story citing a person with knowledge of the situation.

Zipmex problems and the domino effect of the crypto market

Zipmex, which employs over 250 people in Indonesia, Singapore, Thailand and Australia, is just one crypto-based company facing increasing liquidity difficulties as a result of highly leveraged trading tactics that were quickly resolved after a dramatic market decline. The default settings immediately triggered a domino effect.

After filing for creditor protection last week, neighboring Singaporean crypto lender Hodlnaut has announced massive job cuts pending “police negotiations” over the past few days.

Mid-July 2020 marked the first time Zipmex stopped withdrawals, with market conditions at the time prompting the action. It reinstated partial withdrawals, but the Z wallet, which allows incentive-based deposits, remained unavailable.

The exchange, which has a digital asset trading license from the Thai Securities and Exchange Commission and a presence in Australia and Indonesia, revealed at the end of the month that it was considering a potential acquisition proposal and was in discussions with interested parties.

Crypto total market cap at $984 billion on the daily chart | Source: TradingView.com

Featured image from Forbes, Chart from TradingView.com