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Cryptocurrency exchange Zipmex files for bankruptcy protection in Singapore

Her Zinnia Lee

Zipmex has become the latest casualty of the ongoing collapse in cryptocurrencies after experiencing liquidity problems it blames on troubled lenders Babel Finance and Celsius Network.

The Singapore-based crypto exchange said on Wednesday that it has filed suspension applications with the city-state for five business entities. The moratoriums will protect Zipmex from any legal claims or proceedings for a period of up to six months, according to a company statement.

The move will give Zipmex the “breathing space and time it needs” to explore options to resolve the liquidity crisis, formulate a restructuring plan and secure additional investment to continue its operations, the company said. It has already received interest from several potential investors, Zipmex added, including a memorandum of understanding signed with an undisclosed party that could inject what it described as “a large amount of fresh capital.”

Zipmex owes a net $48 million from Hong Kong-based crypto-lending firm Babel Finance and another $5 million from Celsius Network, the lender that filed for bankruptcy in New York as of July 21. Zipmex said it has decided to take legal action against Babel Finance, but potentially write off the loss from Celsius Network from its own balance sheet. Zipmex’s exposure to the two companies forced the trading platform to temporarily suspend withdrawals last Thursday.

Meanwhile, Zipmex faces a possible investigation by the Securities and Exchange Commission of Thailand. The regulator said on Monday it was looking into potential investor losses after Zipmex suspended withdrawals.

Founded in 2018, Zipmex offers cryptocurrency trading and investment services in Thailand, Indonesia, Singapore and Australia. The company had managed to attract a total of $52 million in investments that included B Capital Group, the investment firm led by billionaire Facebook co-founder Eduardo Saverin, Bain Capital veteran Rajarshi Ganguly and legendary investor Howard Morgan. The exchange handled nearly $800,000 worth of spot trades in the 24 hours since Friday, according to Coingecko data.

Source: Capital

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