zipmex

Zipmex says it may resume 100% of Z wallet withdrawals subject to conditions

Creditors have until February 21 to vote on a new scheme proposed by the company that would let customers get all of their frozen deposits back.

Troubled Thai cryptocurrency exchange Zipmex says all of its customers will get their deposits back if eligible creditors approve a scheme of arrangement.

Zipmex announced on Feb. 15 that creditors have until Feb. 21 to vote on the scheme, which is being managed by KordaMentha. They “will receive 100% of their digital assets in the Z Wallet” if the scheme is approved and the cryptocurrency closes its pending investment deal. 

Last July, Zipmex filed for debt relief in Singapore after its counter-party, crypto lending firm Babel Finance, halted withdrawals, citing “unusual liquidity pressures.” The exchange was also impacted by the bankruptcy of crypto lending firm Celsius. Together, the two counterparties owe Zipmex $48 million and $5 million, respectively. 

Zipmex subsequently paused withdrawals on its platform after the revelations last July. However, withdrawals were resumed within two days for its fiat currency and trading funds service Trade Wallet. That said, the firm’s Z Wallet, used for Zipmex services and receipt of earnings and bonuses, remains in the debt moratorium state with the gradual resumption of withdrawals.

Cointelegraph reported on Dec. 2 that Thai Venture Capital V Ventures will acquire Zipmex for $100 million in cash and crypto. According to court documents, Zipmex plans to use cryptocurrency assets received from the transaction to unlock frozen customer accounts on the exchange by April. Subsequent to thisdevelopment, on Jan. 11, the Securities and Exchange Commission of Thailand began a new probe of Zipmex, alleging a breach of local rules. The regulatory agency has also warned investors to carefully review documents issued by the company before making a deal. 

Thai SEC files police report on Zipmex, alleging ‘incomplete’ info for compliance procedures

The Cyber Crime Investigation Bureau in Thailand will now consider whether to pursue legal action against Zipmex following the SEC’s allegations.

Thailand’s Securities and Exchange Commission, or SEC, has accused crypto exchange Zipmex and its co-founder Akalarp Yimwilai of non-compliance with local laws and referred the matter to the police.

In a Wednesday announcement, the Thai SEC alleged Zipmex had not provided information on digital wallets and crypto transactions in compliance with the country’s Digital Assets Act. The regulator claimed that both Akalarp and the exchange forwarded incomplete information outside of an approved timeframe without providing a “reasonable cause” or excuse.

“Such actions by Zipmex and Mr. Akalarp are considered to be non-compliance with the competent official’s orders, which is an offense and has a penalty under Section 75 of the Digital Assets Act,” said the regulatory body. “The SEC has accused Zipmex and Mr. Eklarp to the [Cyber Crime Investigation Bureau], to consider further legal action.”

Zipmex responded to the SEC’s earlier request for information in a Wednesday blog post, saying it was “in the process of compiling relevant documents that belong to both Zipmex itself and Zipmex Pte. Ltd., an entity which is not under the regulatory jurisdiction of the Thai SEC”:

“Any disclosure of Zipmex Pte. Ltd.’s information must be carried out with the utmost care and consideration to ensure that regulations are fully complied with and standards such as data privacy are duly observed.”

The crypto exchange suspended withdrawals in July, citing a “combination of circumstances beyond [its] control.” At the time, Zipmex co-founder Marcus Lim denied reports the exchange was experiencing financial difficulties. However, the firm later filed for debt relief in Singapore and was granted more than three months of creditor protection following a decision from the country’s High Court. The exchange has until Dec. 2 to present a restructuring plan.

Related: Zipmex requests meetings with Thai regulators to discuss ‘recovery plan’

In a Sept. 1 message on its Facebook page, Zipmex said it will be holding an online town hall meeting for both English and Thai speakers on Sept. 14 with its financial and legal advisers. The firm operates crypto exchanges in Thailand, Australia, Indonesia and Singapore.

Cointelegraph reached out to Zipmex, but did not receive a response at the time of publication.

Zipmex requests meetings with Thai regulators to discuss ‘recovery plan’

The firm stated that its potential investors will also attend the meetings, which will include Zipmex, Thailand’s SEC and government agencies.

Asian crypto exchange Zipmex has requested meetings with Thailand’s Securities Exchange Commission (SEC) and other regulators to discuss the firm’s “recovery plan.”

In a statement on Thursday, Zipmex said it had submitted a letter requesting meetings with the securities regulator, which will also be attended by the firm’s potential investors:

“We have requested meetings with Thailand’s Securities Exchange Commission and regulators in the country where we operate to introduce our investors to regulators and present our recovery plan to government agencies.”

Though the company was tight-lipped on who the investors may be, Zipmex noted that it was in “advanced stages” of discussion with two investors after signing three memorandums of understanding (MOUs) over the last month.

The funding round was initially reported in June, suggesting the potential capital injection was not tied to the company’s more recent financial woes.

“The investors we have been in discussion with fully understand our potential and also share our vision and mission of developing the digital economy in Thailand and Southeast Asia,” said Zipmex. 

Despite the lack of names at this stage, the funding round is reportedly expected to be worth $40 million at a valuation of $400 million. Notably, Coinbase has already made an undisclosed strategic investment into Zipmex during Q1.

The requested discussions with the SEC come one month after the regulator launched a hotline for investors impacted by the withdrawal suspensions to report their complaints on the matter.

On Aug. 15, Cointelegraph reported that the company had scored more than three-months of creditor protection, protecting the exchange from potential creditor lawsuits until December 2, 2022, while it comes up with a restructuring plan.

With regulator eyes on Zipmex, the upcoming discussions should bear important information about how the company can proceed moving forward. Zipmex stated that it will soon provide further clarification on the matter around the middle of September.

Zipmex also revealed on Thursday that wallet transfers for its native token ZMT between its Z Wallets and Trade Wallets have been re-established this week, marking further progress as the company works to get fully operational again. This is only available via its website and not through the Zipmex App at this stage, however.

“By resuming the Z Wallet service and doing everything possible to resolve the aforementioned problems. I can confirm that we will continue to move forward to resume services to serve our customers effectively and fairly,” said Akalarp Yimwilai, co-founder of Zipmex.

Related: Thai SEC approves four crypto firms despite Zipmex woes

The company operates compliant exchanges in Thailand, Indonesia, Singapore and Australia. As a result of the market volatility this year and exposure to firms such as Babel Finance and Celsius, Zipmex officially paused wallet withdrawals in late July.

Since then, Zipmex has gradually restored withdrawals for a select number of assets held in Z Wallets, while trade wallet withdrawals were promptly re-enabled in July.

Thai SEC approves four crypto firms despite Zipmex woes

Thailand’s regulators are still approving crypto companies despite one of its largest ones suspending withdrawals.

Thailand’s financial regulator, the Securities and Exchange Commission (SEC), has approved four more crypto companies in the Kingdom.

On Thursday, it was reported in local media that the SEC had granted operating licenses to four more digital asset operators.

These include Krungthai XSpring, a crypto broker affiliated with one of the country’s leading banks, and crypto exchange T-BOX Thailand. Also winning regulatory approval was crypto advisr and fund manager Coindee and Leif Capital Asset Management, which also manages funds.

The four firms have yet to commence operations, however, as the regulator still needs to inspect their operations.

Thailand now has 21 fully regulated digital asset operators comprising nine exchanges, nine brokers and three fund managers. Thailand’s military-backed government has been largely tolerant of cryptocurrencies despite the central bank’s efforts to restrict them.

The report noted that another major player is waiting to enter the burgeoning Thai crypto market. Gulf Innova and Binance Capital Management aim to launch the jointly owned “Gulf Binance” crypto exchange and brokerage.

Crypto volumes in Thailand surged almost 600% in early 2021 as the bull market was building momentum.

Related: After weeks of rumors, Thai crypto exchange Zipmex files for debt relief in Singapore

The move comes amid turmoil regarding the Singaporean exchange Zipmex, which also operates in Thailand. Late last month, Zipmex Thailand suspended withdrawals for customers in the country using its Z Wallet. Shortly after, the SEC launched a hotline for Zipmex customers to submit details on their losses.

On Monday, the SEC launched an investigation into Zipmex, claiming the company may have violated trading rules by suspending withdrawals. It stated that the firm cited inadequate reasons for such actions as “market fluctuations.”

The regulator ordered the firm to resume trading operations, and by Tuesday, Zipmex had resumed withdrawals for Solana (SOL) and Ripple (XRP) the following day, as reported by Cointelegraph. Withdrawals of larger assets such as Bitcoin and Ether (ETH) remain suspended, as are withdrawals from its ZipUp+ service.

On Thursday, the firm tweeted that it was committed to resuming all services asap.

Zipmex was caught up in this year’s crypto contagion due to its exposure to Celsius and Babel Finance. On Wednesda, Zipmex Thailand CEO Akalarp Yimwilai said that its parent company in Singapore had injected $5 million to compensate for the Celsius losses.

After weeks of rumors, Thai crypto exchange Zipmex files for debt relief in Singapore

It appears the firm’s fortune took a turn to the worst via its exposure to troubled crypto lending service Babel Finance.

In a document dated Wednesday, July 27, Thai cryptocurrency exchange Zipmex said that its solicitors in Singapore, Morgan Lewis Stamford LLC, filed five moratorium applications, or legal authorization to debtors to postpone payment, under Section 64 of Singapore’s Insolvency, Restructuring and Dissolution Act 2018 on behalf of the company. Zipmex seeks to protect itself against third party actions, claims, and proceedings for a period of six months while the filing is active. The announcement came just one week after its CEO and co-founder Marcus Lim publicly denied the firm was facing financial troubles. Rumors have been circulating in the past month that the cryptocurrency exchange was insolvent after a proposed acquisition by Coinbase fell through. 

Additionally, Zipmex already filed for credit relief last Friday but did not disclose the act until Wednesday. All of its subsidiary entities, consisting of Zipmex Asia Pte Lt, Zipmex Pte Ltd, Zipmex Company Limited, PT Zipmex Exchange Indonesia and Zipmex Australia Pty Ltd, were included in the filing. Furthermore, Zipmex says that a case conference regarding the filing has been scheduled for 4 pm UTC Friday and that creditors had just until the deadline of 10 am Thursday to inform solicitors that they wished to attend.

It appears that Zipmex’s fortunes took a turn for the worst after the collapse of Hong Kong-based crypto lender Babel Finance. As told by Zipmex: 

“The moratoriums would give the Zipmex Group the breathing space and time it requires to explore options to resolve the liquidity situation (including to pursue the recovery against Babel Finance), and to formulate a restructuring plan and secure additional investment to secure the Zipmex Group’s operations moving forward.”

Zipmex claims that it’s in the advanced stages of securing new investments to relive its liquidity crisis. Currently, Thailand’s Securities and Exchange Commission is asking affected investors to register complaints against the firm on its official site. 

Editor’s Note: The article has been updated to reflect that Zipmex submitted moratorium application, but is not in the procedures of bankruptcy. 

Zipmex resumes withdrawals for trade wallets

The crypto exchange said it had $48 million in exposure with Babel Finance and $5 million with Celsius — both firms faced liquidity and insolvency issues, respectively.

Cryptocurrency exchange Zipmex has resumed withdrawals from its trade wallet after two days, but said transfers, deposits and trade will continue to be disabled from its Z Wallet.

In a Friday announcement, Zipmex said its Thailand-based users could make withdrawals from its trade wallet, with the function expected to be “re-enabled this evening” for clients in other countries. The crypto exchange has had withdrawals disabled since Wednesday, citing a “combination of circumstances” beyond its control, including the recent market volatility.

“Ever since the black swan events surrounding the crypto space Zipmex has retrieved the majority of our funds and assets that were historically deposited with our deployment partners and have been actively working to resolve the situation for the remaining outstanding assets,” said Zipmex. “There were no materially adverse impacts to our operations.”

Cointelegraph reported on Wednesday that, according to a person close to the exchange, Zipmex had roughly $100 million in exposure to crypto lender Babel Finance, which was at risk of default. The Hong Kong-based firm halted withdrawals in June, citing “unusual liquidity pressures.”

However, according to Zipmex, the exchange only has $48 million in exposure with Babel and $5 million with Celsius, which may also be facing insolvency. Zipmex said it was in discussions with Babel to resolve the situation and was “actively engaging” with Celsius:

“Our exposure to Celsius was minimal, as such, we were intending to write this off against our own balance sheet.”

Related: Strict Thai crypto regulation causes SCB to delay Bitkub acquisition

Zipmex offers services for users in Thailand, Indonesia, Singapore and Australia. Cointelegraph reported in August 2021 that the exchange’s user base had reached 200,000 with more than $1 billion in gross transaction volume since its launch in 2019.