Thai Crypto Exchange Zipmex's $100 Million Bailout Stumbles as Payment Missed
The future of troubled crypto exchange, Zipmex, hangs in the balance as its $100 million bailout deal faces jeopardy due to a missed payment of $1.25 million on March 23.
The deal was with V Ventures, a subsidiary of Thoresen Thai Agencies Pcl, and the exchange is yet to receive the latest payment.
Zipmex's uncertainty is further highlighted by a letter the company issued, stating that it has no indication of "when and whether" the payment will be made, and is now collaborating with advisers to determine the next course of action.
The exchange said it has the needed cash to pay employee salaries in its Thailand, Singapore, and Indonesia branches.
However, it would have to start liquidation proceedings for a unit, Zipmex Technology Co., and suspend that division’s payroll unless it gets the money.
According to the letter, Zipmex has been receiving three tranches of funding.
The crypto fallout continues
Established in 2018, Zipmex offers crypto trading and investment services in Thailand, Indonesia, Singapore, and Australia.
The Asian crypto exchange announced last summer that it is halting withdrawals due to volatile market conditions.
The platform faced a liquidity crunch following exposure to the troubled crypto lender Babel Finance.
"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," the exchange said on Twitter at the time.
In August last year, Bloomberg reported that Zipmex plans to meet with potential investors and Thailand’s financial regulator to discuss a recovery plan.
By November, the platform was in advanced discussions with venture capital fund V Ventures over the sale of a majority stake.
Earlier this year, the Thai Securities and Exchange Commission said it was investigating whether Zipmex breached local rules in its offer of certain digital-asset products.
2022 Saw High-Profile Crypto Firms Collapse
Aside from Zipmex, a number of other major crypto companies also collapsed last year amid a broader market downturn that started with the implosion of the Terra ecosystem.
The fallout of Terra's decentralized stablecoin UST prompted a series of bankruptcies, including the implosion of major crypto lenders like Celsius and BlockFi, and even the collapse of cryptocurrency exchange FTX.
The crypto meltdown even spilled into the mainstream banking system, taking down crypto-friendly bank Silvergate, which announced earlier this month that it has decided to wind down its operations and liquidate its subsidiary.
After Silvergate, two other banks, including Silicon Valley Bank and Signature Bank, both of which had some exposure to crypto firms, also announced their closure.