Thailand-Based Crypto Platform (Zipmex) Freezes Clients’ Withdrawals
- Zipmex blames the current volatile market conditions for its action.
Thai crypto exchange, Zipmex, has announced a suspension on customer withdrawals on its platform. The company announced this via a tweet from its official Twitter account. In the tweet, Zipmex blamed the volatile market conditions and their consequences on its key business partners as the cause of its decision.
It also said other circumstances beyond its control were the reason behind its decisions. The company also didn’t specify when it would resume withdrawals for its customers in the announcement.
The crypto platform touts itself as the best digital asset exchange in Asia. The platform allows its more than two million users to buy, sell or swap digital assets such as Bitcoin, Ethereum, and its governance token, ZMT. Following the announcement, the price of Zipmex’s governance token dropped by over 29 percent. ZMT currently trades at $0.40.
An Insight Into Zipmex Operations
In June last year, Coinbase (leading crypto exchange in the US) financed Zipmex with an undisclosed amount. Two months later, Zipmex raised $41 million in a funding series with Thailand’s biggest bank (the Bank of Ayudhya, Krungsri) leading that funding round.
A few weeks after the funding round, the company also partnered with card payment solutions giant, Visa, to launch the Zipmex card. Despite having an operating license in Thailand, it has been unable to provide its services to Singapore’s crypto market players.
The company said it couldn’t agree to the condition given by the Monetary Authority of Singapore (MAS) before running its services there. The MAS demanded that Zipmex put a notice on its website saying investors won’t be able to reclaim their funds with Zipmex if the company folds up.
However, Zipmex also offers its products and services to the crypto markets in Indonesia and Australia. Its interest-bearing accounts and crypto spot trading are two of its most popular products. The company’s website states that users who deposit their funds in the platform can earn up to 10 percent annual profits.
Zipmex offers 10 percent annual returns for USDC stablecoin deposits, while it offers 6 percent annual returns for Bitcoin (BTC) and Ethereum (ETH) deposits. The exchange’s trading volume within the last 24 hours currently stands at $5.4 million. Zipmex is the latest crypto firm to pause withdrawals on its platform, citing the current crypto winter.
Last month, crypto lenders, Celsius network, and Voyager digital took a similar step. The move resulted in serious panic in the Defi sector and a further decline in the fragile crypto market. Voyager digital even made a chapter 11 bankruptcy filing earlier this month.
Similarly, Babel Finance froze customer withdrawals following the insolvency issues at the crypto hedge fund, three arrows capital, 3ac. This Zipmex news is a testament to a recent statement by FTX founder and CEO Sam Bankman-Fried. Bankman-fried said most small crypto exchanges are already insolvent, but their insolvency is not yet made public.