In a major development, the Singapore High Court has granted Zipmex crypto exchange a three-month extension to work out its liquidity difficulties.

Last month, a major suspension of client withdrawals occurred at Zipmex, a prominent South Asian crypto exchange. The firm sought bankruptcy protection in Singapore to avoid creditors last week.

This is the second extension granted to Zipmex, which was first granted a six-month moratorium in October 2020.

Zipmex has been facing financial difficulties since early 2020 when the COVID-19 pandemic caused a sharp decline in cryptocurrency prices.

The company has since been working to restructure its business and reduce its debt.

In January 2021, Zipmex announced that it had secured $3 million in funding from an undisclosed investor. The company has also been seeking to raise additional funds through a crypto-lending platform.

Zipmex Group asked for a six-month deferment for its five companies: Zipmex Australia, Zipmex Asia, Zipmex Thailand, and Zipmex Indonesia. This would give them time to avoid any potential creditor lawsuits.

The court, nevertheless, has allowed it just over three months to address its liquidity concerns. The deadline was postponed to December 2.

The Singapore High Court approved the merger of Vauld and Zipmex, which like Zipmex had discontinued withdrawals in July. And was given a three-month moratorium extension earlier this month.

Crypto exchanges have been facing challenges in recent months as the price of Bitcoin. And other cryptocurrencies have fallen sharply from their highs in late 2017 and early 2018. Many exchanges have been forced to lay off staff, and some have even shut down completely.

The liquidity crisis of Zipmex

The firm’s liquidity crisis was instigated by its relationship with Babel Finance and Celsius. The two crypto lenders on the verge of failure. To date, withdrawals have been halted by both Celsius and Babel Finance.

According to court documents, Zipmex is owed a total of US$4.4 million by both Celsius and Babel Finance. The Singapore-based exchange had originally sought a moratorium in February 2019, but the High Court rejected its application.

In its latest application, Zipmex cited the recent Crypto-asset Task Force (CATF) report. As one of the reasons why a moratorium should be granted.

The CATF report, released on March 29, 2019, recommended that Crypto-asset businesses in the UK should be regulated by the Financial Conduct Authority (FCA).

Zipmex is working to fix its financial crisis so it can start transferring money between its Trade and Z wallets again. It’s hoping to raise money from investors, and recently said it signed a memorandum of understanding with two investors.

Clients are currently not allowed to withdraw funds from the Z wallet. Which includes a ZipUp+ option for depositing crypto assets and earning rewards. It also allows users to deposit and withdraw fiat money, as well as trade and store digital currencies.

The firm has been in hot water since mid-July when it stopped letting clients withdraw money from their Z wallets.

Crypto exchanges have been struggling with liquidity problems since the beginning of the year. As the coronavirus pandemic dried up trading activity and investors started cashing out.

About Zipmex

Zipmex is a digital asset exchange founded in 2018. The company is based in Singapore and has offices in Indonesia, Australia, and Hong Kong. Zipmex allows users to buy and sell cryptocurrencies, as well as trade on margin.

The company also offers Crypto-lending services. Crypto lending is a type of lending that allows users to borrow against their cryptocurrency holdings as collateral.

Zipmex was founded by Hugh Hiew and Akbar Thobhani. Hiew is a former managing director at Goldman Sachs and Thobhani is a former software engineer at Google.

The firm is one of the few exchanges that offer crypto lending and borrowing services. Crypto exchanges usually offer margin trading, which lets users trade with leverage, but they often don’t offer lending and borrowing services.


James Atkins

I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.