Zipmex seeks bankruptcy protection in Singapore

The cryptocurrency exchange Zipmex, which primarily served Southeast Asia, announced that it had submitted a petition for protection from creditors in Singapore, making it the most recent casualty of the widespread bear market in digital currencies.

Last week, Singapore-based cryptocurrency exchange Zipmex restored withdrawals one day after suspending them on the previous Wednesday (July 20). The exchange also stated that it was attempting to address its exposure of US$53 million to cryptocurrency lenders Babel Finance and Celsius.

According to a statement released by the cryptocurrency exchange on July 27, the company’s legal counsel had on July 22 submitted five petitions seeking moratoriums that would ban legal actions against Zipmex for up to six months.

When a company submits this kind of filing in accordance with Singapore legislation, the company is granted an automatic moratorium for a period of thirty days or until a decision is made on the application by a Singapore court, whichever comes first.

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According to its website, Zipmex operates in Singapore, Thailand, Indonesia, and Australia. It is the latest in a string of crypto players around the world to run into difficulties as a direct result of a sharp sell-off in markets that began in May with the collapse of two paired tokens, Luna and TerraUSD.

The company announced yesterday that it intends to use the time that is afforded to it by bankruptcy protection to overcome the challenges it is having with its liquidity, develop a plan for its restructuring, and seek fresh investments to support its operations going ahead. The company asserts that it has already received “formal, registered interest” from possible investors in order to bolster its financial situation, and it says this has happened already.

After Zipmex momentarily halted withdrawals, Thailand’s Securities and Exchange Commission announced on Monday that it was collaborating with law enforcement to investigate the possibility of financial damages incurred by members of the general public.

On July 22, the company lodged moratorium petitions in Singapore for its numerous corporations. This move came after the company stopped user withdrawals the previous week. These companies are Zipmex Asia Pte Ltd, Zipmex Pte Ltd, Zipmex Company Limited, and PT Zipmex Exchange Indonesia, respectively.

The recent failure of the cryptocurrency fund known as Three Arrows Capital has also jolted Singapore’s ambitious cryptocurrency sector, which is considered to be the largest in the Asia-Pacific region by some criteria.