Singapore Court Grants Troubled Crypto Exchange Zipmex Over 3 Months to Resolve its Liquidity Issues
- Justice Aedit Abdullah from the Singapore Court gave each of the five Zipmex entities a moratorium to shield its operations.
- Following the announcement, Zipmex native token ZMT has gained approximately 0.2 percent in the past few hours.
Troubled crypto exchange Zipmex Pte has been granted a grace period of over three months to resolve its liquidity issues by a Singapore court. According to a report by media outlet Bloomberg, Zipmex has until December 2 this year to resolve its issues before anyone can file a lawsuit against the company.
Justice Aedit Abdullah from the Singapore Court gave each of the five Zipmex entities a moratorium to shield its operations.
Following the announcement, Zipmex native token ZMT has gained approximately 0.2 percent in the past few hours. However, the token has lost most of its value since the onset of the crypto winter.
According to our market data, the asset is down approximately 81% in the past year and 42 percent in the last 30 days.
Zipmex Liquidity Crisis
Zipmex loaned $48 million to Babel Finance and $5 million to Celsius. Worth noting, that both Babel Finance and Celsius have fallen victim to the crypto downside, thereby not being in a position to repay their debts.
Following those happenings, Zipmex announced that it has paused all withdrawals from its wallet in mid-July until further notice. However, the company has been working on resolving the issue ever since. Remember the exchange has strong financial backing from notable institutional investors including Coinbase Global Inc. (NASDAQ: COIN).
Earlier this month, the exchange through one of its founders Dr. Akalarp Yimwilai said;
“Zipmex is gradually releasing Z Wallet tokens and crediting them into Trade Wallet, starting with these five tokens: Solana (SOL), Ripple (XRP), Cardano (ADA), Bitcoin (BTC), and Ethereum (ETH).”
The company operates in South east Asia and will have its entity protected under the standing moratorium. The five entities include Zipmex Asia Pte. Ltd., Zipmex Pte. Ltd., Zipmex Company Ltd. (incorporated in Thailand), PT Zipmex Exchange Indonesia, and Zipmex Australia Pty. Ltd.
The company has defended its actions in loaning Celsius and Babel Finance significant amounts of money. For one, Celsius Network raised over $ 750M in funding by the end of its Series B round at the end of 2021. Thereby valuing the company at $ 3.5 billion.
On the other hand, Babel Finance raised over $ 80 million in a Series B funding round in May 2022, hence bringing its total value to $ 2 billion.
Prior to the 2020/2021 crypto bull market, there was a huge wave of global blockchain adoption. Profit-centered blockchains were developed without having the community in mind. The results are scams, and rug pulls. Mind you the industry is less regulated, thus most have gotten away with their scams including Terra’s Do Kwon.
Worth noting, that the FTX boss had predicted most crypto firms will fail as they are secretly struggling with liquidity.