Zipmex Suspends Withdrawals as CEO Denies Financial Trouble Rumors
The CEO of Thai crypto exchange Zipmex denied rumors of financial trouble just moments before the group announced it would pause withdrawals on the platform.
Thai cryptocurrency exchange Zipmex has paused withdrawals on its platform following a “combination of circumstances” beyond its control.
Following the failed acquisition of the Thai exchange by Coinbase, the rumors that Zipmex could be in trouble were dismissed.
Coinbase offered to buy Zipmex in Q1 2022. Acquisition failed on June 9. Instead, Coinbase made an undisclosed “strategic investment”. “An investor makes more sense at this stage,” Lim told CoinTelegraph. He said the group talks to many parties at once and cited the bear market as the reason Coinbase opted out of the acquisition.
“The acquisition fell through due to market conditions. They’ve pulled out in many countries around the world such as Turkey and in Latin America. Coinbase is a great strategic partner to the business.”
According to the Block, Zipmex is working on a Series B+ raise that could value it at $400 million. CoinTelegraph reported that Zipmex has compliant operations in Thailand, Indonesia, Singapore, and Australia.
The Block reports that Zipmex is planning a $400 million Series B+ raise. Zipmex has compliant operations in Thailand, Indonesia, Singapore, and Australia, according to CoinTelegraph. In August 2021, Zipmex’s user base reached 200,000, reporting over $1 billion in gross transaction volume since its late 2019 launch.
Zipmex’s Thai subsidiary has a digital assets Exchange license and brokerage license from the Thai Ministry of Finance, while the group is regulated by the SEC. An anonymous source from Zipmex said the exchange could be in trouble prior to freezing customer funds. Zipmex “has a Thai exchange license and exempt status in Singapore,”
“Under the Thai License, they are strictly not allowed to touch customer funds. However, Zipmex has a product on the exchange called zip-up that effectively lets users move funds under the Singapore entity to earn yield.”
The source explained that the “funds were given to Babel to generate the yield. About $100m was lent to Babel, which is now at risk of default.” In June, Hong Kong-based asset manager Babel Finance halted withdrawals, due to “unusual liquidity pressures.”
South East Asia has not been shielded from the bear market crypto contagion, as in Singapore, Vauld exchange recently froze customers’ funds. Nexo has reportedly offered a buyout but the group also offered to buy out Celsius.
When pressed on whether Zipmex could face the same consequences as Celsius, the source commented that “it’s possible. Babel hasn’t settled their default yet, and it’s a 100 million dollar hole.” Celsius froze users’ funds on June 13 and many fear the exchange could suffer the same fate as Mt. Gox.
In response to the allegations, Lim told Cointelegraph that it was “business as usual.” Lim emphasized that the group “doesn’t comment on rumors.”
However, as per reports from customers of Zipmex and the official Zipmex Twitter account, the firm has since frozen customer withdrawals.
Source: CoinTelegraph. All Rights Reserved
