Zipmex Becomes Latest Exchange to Fall Victim to Crypto Contagion

Zipmex has become the latest crypto exchange to halt withdrawals over “resulting financial difficulties of key business partners”.

Zipmex, a cryptocurrency exchange operating in Singapore and Thailand, announced that it would temporarily pause withdrawals of clients’ funds from the platform. The exchange blamed falling prices of crypto assets and loan defaults from the industry’s big players. 

The troubled exchange stated the move was due to issues beyond their control, including “volatile market conditions” and the financial difficulties of key business partners, reported Bloomberg. Akalarp Yimwilai, CEO of Zipmex revealed on YouTube that the firm was in talks with investors to raise funds in a bid to resume normal operations.

Yimwilai revealed via livestream that Zipmex had large exposures to both Babel Finance and Celsius, lenders that have filed for restructuring or bankruptcy. 

No protection for users 

Zipmex operated a range of digital products for its customers including ZipUp+ which offered a 10% return on Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC) deposits. A notice on the website indicates that users of the product cannot withdraw their assets.

“This means that you will not be able to recover all the money or DPTs [digital payment tokens] you paid to Zipmex if Zipmex’s business fails,” read the notice. The firm is not licensed by the Monetary Authority of Singapore (MAS) with the regulator not issuing any comments since the announcement.

Zipmex operated in Singapore under an exempted payment service provider permit, but in Thailand, the exchange was issued with a license by the Securities and Exchange Commission of Thailand for digital asset trading. Thailand’s regulator has asked Zipmex to write to it explaining the situation, with Yimwilai stating that the firm had done so.

A long string of troubled crypto firms

Zipmex is just one in a growing line of crypto exchanges facing a liquidity crunch. In the last 30 days, a handful of firms had paused withdrawals for their customers in a bid to survive the chilling crypto winter.

Celsius was the first to make the announcement and in no time, Voyager Digital, Babel Finance, Vauld, and CoinFlex followed suit. Each of the firms cited unfavorable market conditions that were triggered by Terra’s implosion and Three Arrows Capital (3AC) defaulting on its loans.