Zipmex, the Singapore-based crypto exchange, has halted withdrawals until further notice. The reason is attributed to the market crash and other factors, which likely link back 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”, Zipmex said in a Twitter post.
According to an anonymous source, a Singaporean arm of Zipmex is on the verge of bankruptcy. Zipmex has a license for digital-asset trading in Thailand but they are absolutely not permitted to reappropriate regular customer funds. However, a product of Zipmex called ZipUp that allows users to send funds to the entity in Singapore to generate income. About $100 million of funds lent to Babel Finance through ZipUp is at risk of loss.
Since the beginning of June, under the pressure of the liquidity crisis, Babel Finance has suspended withdrawals and hired experts to restructure the company. But at the time of writing, both Zipmex and Babel Finance declined to comment on these issues.
In early July, crypto lending platform Vauld also suspended withdrawals. The company has been struggling with many difficulties due to the market plunge and poor financial situation of its business partners. Most recently, Skybridge Capital, the investment company of Anthony Scaramucci, a well-known American financier and political figure, has suspended redemptions in one of its funds after sharp declines in stocks and cryptocurrencies.
Zipmex launched in 2018, providing trading and investment services in Thailand, Indonesia, Singapore and Australia. According to the information on the company website, customers can get interest up to 12% per year by depositing money into the platform. The exchange raised 11 million USD in Series B round in March and Coinbase had been in talks to acquire Zipmex but the deal failed on June 9.
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