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Zipmex Files For Protection Against Creditors In Singapore
Embattled crypto exchange Zipmex is seeking a moratorium extension to prevent creditor legal action. The exchange is currently facing a liquidity crunch due to its exposure to troubled crypto firms Babel Finance and Celsius.
Kabir V.
11:43 28th Jul, 2022
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Troubled South Asian crypto exchange Zipmex has filed for protection against creditors in Singapore as it faces a liquidity crunch.

Announcing the news on Wednesday, Zipmex said its solicitors Morgan Lewis Stamford LLC filed five moratorium applications under Section 64 of Singapore’s Insolvency, Restructuring and Dissolution Act 2018 on behalf of several of its entities on July 22.

Under Singapore law, an automatic moratorium for 30 days arises upon filing the application. The Zipmex Group is now seeking a moratorium extension of up to six months to prohibit and restrain the commencement or continuation of legal proceedings against it.

Zipmex's move is similar to Vauld, the beleaguered Asian crypto lender that abruptly halted client withdrawals earlier this month and owes over $400 million to creditors.

The exchange halted and resumed withdrawals earlier this month but is currently working towards resolving its liquidity situation and re-enabling the Z Wallet for all users. The Z Wallet is the main wallet used for storing cryptocurrencies on the platform and it's separate from the Trade Wallet, which is used for trading.

Zipmex Group's entities that have sought the moratorium relief in the applications are: Zipmex Asia Pte Ltd, Zipmex Pte Ltd, Zipmex Company Limited (incorporated in Thailand), Zipmex Exchange Indonesia and Zipmex Australia Pty Ltd.

"The moratoriums would give the Zipmex Group the breathing space and time it requires to explore options to resolve the liquidity situation (including to pursue the recovery against Babel Finance), and to formulate a restructuring plan and secure additional investment to secure the Zipmex Group’s operations moving forward," said Zipmex.

Recently Zipmex disclosed that it had a $48 million exposure to Babel Finance and Celsius, two crypto firms that have defaulted on loans after accruing severe losses in the crypto market.

Today reiterated that it has received interest from various parties for potential investment and said that it is in "advanced stages of negotiations with them on the structure and terms of their potential investments."

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