The Securities and Exchange Commission is investigating whether the embattled crypto exchange Zipmex, which is in the midst of being taken over by a Thailand-linked venture capital fund, breached local rules in its offer of certain digital-asset products.
The SEC wrote to Zipmex Thailand chief executive officer Akalarp Yimwilai on Dec 28, noting that some of the firm’s activities may be in violation of digital-asset business rules, according to a letter seen by Bloomberg News.
The company could have been operating as a “digital-asset fund manager without permission”, the SEC said, giving a Jan 12 deadline for clarification from Zipmex.
The SEC last month cautioned investors to carefully review individual agreements proposed by Zipmex before deciding to make any deals with the company.
Zipmex Asia Pte is in the process of being acquired for about US$100 million by V Ventures, a subsidiary of the SET-listed shipping company Thoresen Thai Agencies Plc, a person familiar with the matter said last month.
The Asian crypto exchange, which had many customers in Thailand, has been restructuring after falling victim to the prolonged bear market in virtual coins. It froze customer withdrawals last July because of liquidity problems.
The questions from the SEC concern the Bangkok-based exchange’s ZipUP and ZipUP+ programmes, offered since October 2020 which allowed customers to earn returns on their tokens.
Zipmex hired Babel Finance, an Hong Kong-based crypto lender, to operate and manage the investments. Babel was later to have found to have lost some $280 million worth of bitcoin and other tokens through failed proprietary trading of customers’ assets.
A spokesperson for Zipmex declined to comment. The SEC could not immediately be reached for comment.