SINGAPORE: The cryptocurrency exchange Zipmex said on Friday that it has filed for bankruptcy protection in Singapore, becoming the latest victim of the global downturn in digital currencies.
Zipmex, which operates in Thailand, Singapore, Indonesia and Australia, resumed withdrawals last week, a day after suspending them on July 20, and said it was working to address its exposure of US$53 million to the failing crypto lenders Babel Finance and Celsius.
Zipmex’s solicitors submitted five applications on July 22 seeking moratoriums to prohibit legal proceedings against Zipmex for up to six months, the exchange said.
Under Singapore law, such a filing grants companies an automatic moratorium for 30 days, or until a Singapore court makes a decision on the application, whichever is earlier.
Zipmex is the latest in a string of crypto players globally to run into difficulties following a sharp sell off in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD.
The Thai Securities and Exchange Commission said on Monday that it was working with law enforcement to look into potential losses among the public after Zipmex temporarily suspended withdrawals.
The problems at Zipmex stemmed from a financial product called ZipUp+ linked to Babel Finance and Celsius.
ZipUp+ is an interest-bearing account that offers an attractive yield as high as 10% when investors deposit their digital assets such as Bitcoin (BTC), Ethereum (ETH), USD Coin (USDC) and Tether (USDT).
The company said it had exposure of $48 million to Babel and $5 million to Celsius.
Depositors are exposed to huge risks of losses if the company fails to retrieve money from its partners to refund customers.
In the meantime, Zipmex says it has signed a memorandum of understanding with a prospective investor to inject cash into the company, but further details have not been disclosed.