Southeast Asia-focused cryptocurrency exchange, Zipmex, in markets like Singapore, Thailand, Indonesia and Australia is the latest company to fall victim to the crypto contagion. The crypto exchange has just announced to pause withdrawals until further notice.
As the turmoil in the industry continues, some of the biggest crypto firms are cutting jobs, filing for bankruptcy and suspending twithdrawals and transfers. Market leaders including, Celsius Network, Voyager Digital, and Vauld, among a string of other companies have succumbed to cryptocurrencies tailspinning into chaos. Singapore-headquartered crypto exchange, Zipmex, became the latest casuality of the bear market to pause withdrawals.
Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.
— ZIPMEX (@zipmex) July 20, 2022
What Prompted The Pause?
📢Important Announcement 📢
We are extending our maintenance period and will re-enable withdrawals and deposits for your Trade Wallet on 21 July 2022 at 18:00 (GMT+7). Trading will remain disabled until further notice. pic.twitter.com/2qCDzcyjdY
— ZIPMEX (@zipmex) July 21, 2022
In a tweet on Wednesday, Zipmex cited “volatile market conditions, and the resulting financial difficulties of our key business partners” as reasons for its decision to suspend withdrawals. Zipmex Thailand CEO, Akalarp Yimwilai, announced in an online livestream on Wednesday evening that the local affiliate’s difficulties stemmed from problems at Singapore-based Zipmex Global, whose partners, including Babel Finance and Celsius, were experiencing liquidity problems. The digital asset exchange wrote,
“Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice”.
According to reports, a person with direct knowledge of the matter said Zipmex’s pause started from the platform’s exposure to troubled crypto lender, Babel Finance. However, neither Zipmex Global nor Yimwilai did not respond to requests for comment. In the YouTube livestream, Yimwilai, revealed that the firm was in talks with investors to raise funds in a bid to resume normal operations.
Mounting Trouble for Zipmex
In March 2022, Zipmex disclosed that it had raised an additional $11 million as part of its series B round from investors including B Capital, TNB Aura and Bank of Ayudhya’s Krungsri Finnovate among others. Zipmex Thailand is the company’s Thai unit that has a digital assets exchange license and a brokerage license issued by the Ministry of Finance of Thailand. The firm is regulated by the Securities and Exchange Commission in the country.
It is believed that Zipmex was wrapped in trouble prior to freezing customers’ funds. According to a source close to the exchange, who chose to remain anonymous, Zipmex “has a Thai exchange license and an exempt status in Singapore.” He explained,
“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.”