Zipmex files for bankruptcy protection, seeks moratoriums from third-party creditors
Singapore-based crypto trading platform Zipmex has halted some of its core activities in response to its partner Celsius Network and Babel Finance’s financial problems, which it has revealed. The trading platform is reportedly seeking bankruptcy protection from the local court.
With the latest incident, Zipmex announced that it has filed for a moratorium in Singapore that will protect it from its creditors in the country while it explores various solutions to its problems. Local media reported that five applications were submitted last Friday (July 22) on behalf of the firm’s various units seeking moratoriums on legal action for up to six months.
“We filed moratorium applications in Singapore for all Zipmex entities,” Zipmex said in the announcement, “This helps protect Zipmex from third-party actions, claims and litigation while it is active, and allows the team to focus all of our efforts on to resolve the problem liquidity situation, without having to worry about defending potential claims or adverse actions while doing so. It is important to note that a moratorium is not a liquidation of any company and there is no significant change in status since our last update .”
Under local law, such a filing provides an automatic grace period of either 30 days or until a court in Singapore makes a decision on the application, whichever occurs first.
Already in June this year, the American digital currency trading platform Coinbase Global Inc planned to invest in Zipmex after a successful acquisition deal.
Blockchain.News previously reported that Zipmex is in talks with “interested parties” with whom it discussed potential rescue options. While this option is open to the firm, it is also optimistic that it can salvage some funds from the $48 million owed by Babel Finance in its bankruptcy proceedings.
The Zipmex situation can best be described as a contingency due to the unsecured exposure it has. The firm has said that it would not mind writing off the $5 million claims against Celsius Network against its own balance sheet, as it has anticipated that the process to claim the funds could be very long and almost impossible.
Amid the filed moratorium and its ongoing issues, Zipmex said it will “continue to operate the Trade Wallet, NFT platform and other products as normal, and there is no planned interruption to” these services.
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