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Bangkok Post
Bangkok Post
Business

Bailout of crypto exchange Zipmex falters

Vehicles drive past a billboard promoting the Zipmex app in February last year. (Bangkok Post File Photo)

The rescue plan for the embattled regional crypto exchange Zipmex is beginning to fray after the company failed to receive the most recent payment due under a US$100-million venture capital buyout.

The payment of $1.25 million was due on March 23 to fund working capital, according to a letter seen by Bloomberg News. Zipmex said in the letter that it would have to start liquidation proceedings for a unit, Zipmex Technology Co, and suspend that division’s payroll unless it gets the money. 

Zipmex is being acquired for about $100 million by V Ventures, a subsidiary of the SET-listed shipping company Thoresen Thai Agencies Plc. The letter said Zipmex has been receiving three tranches of funding. The crypto exchange has been restructuring after falling victim to last year’s bear market in virtual coins.

Zipmex units in Thailand, Singapore and Indonesia for now have the needed cash to pay salaries, according to the letter. Zipmex has not received a final indication on “when and whether” the latest payment will be made and said it is working with its advisers on next steps. 

Zipmex declined to comment as it was “bound by confidentiality”, said Marcus Lim, group chief executive officer in response to an email seeking comment. V Ventures did not immediately respond to request for comment.

The Thai Securities and Exchange Commission in January sad it was investigating whether Zipmex breached local rules in its offer of certain digital-asset products.

The SEC in December cautioned investors to carefully review individual agreements proposed by Zipmex before deciding to make any deals with the company.

Zipmex halted withdrawals on July 20 last year and later received insolvency protection from the Singaporean government, but investors were no longer able to access their funds.

Zipmex Thailand, a unit of Singapore-based Zipmex Asia Pte, faced scrutiny last year after Babel Finance, a Hong Kong-based crypto lender, was found to have lost roughly US$280 million worth of Bitcoin and other tokens through failed proprietary trading of customers’ assets.

Zipmex had hired Babel Finance to operate and manage the investments.

The issue affected withdrawals from the Bangkok-based exchange’s ZipUp and ZipUp+ programmes, which allowed customers to earn returns on their tokens.

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