THAI cryptocurrency exchange Zipmex paused withdrawals of Thai baht and cryptocurrencies this evening (July 20) citing market volatility and financial problems caused by major business partners, Naewna newspaper said.
The company tweeted this message at 5. 15 p.m.: “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.”
Meanwhile Cointelegraph.com said its reports that Zipmex could be in trouble were dismissed as “rumours” by CEO and co-founder Marcus Lim moments before the group announced it would pause withdrawals on the platform with this coming after the failed acquisition of the Thai exchange by Coinbase.
Coinbase made an offer to acquire the Thai cryptocurrency exchange Zipmex early in quarter one 2022. On June 9, the acquisition fell through. Instead, Coinbase made a “strategic investment” into the company — the amount has not been disclosed.
Lim told Cointelegraph that while Coinbase is an interesting partner, “an investor makes more sense at this stage.” He explained that the group speaks to a number of different parties at any point in time, citing the bear market as the reason why Coinbase opted out of the acquisition:
According to the Block, Zipmex is working on a Series B+ raise that could value it at $400 million. Cointelegraph reported that Zipmex has compliant operations in Thailand, Indonesia, Singapore and Australia. In August 2021, Zipmex’s user base reached 200,000, while it has reported over $1 billion in gross transaction volume since its launch in late 2019.
According to Zipmex press releases, the company’s Thai subsidiary has a Digital Assets Exchange licence and Brokerage licence issued by the Ministry of Finance of Thailand, while the group is regulated by the Securities and Exchange Commission.
However, a source close to the exchange explained that Zipmex could be in trouble prior to freezing customers’ funds. According to the source, who chose to remain anonymous, Zipmex “has a Thai exchange licence and an exempt status in Singapore.”
The source explained that the “funds were given to Babel to generate the yield. About $100m was lent to Babel, which is now at risk of default.” In June, Hong Kong-based asset manager Babel Finance halted withdrawals, due to “unusual liquidity pressures.”
South East Asia has not been shielded from the bear market crypto contagion, as in Singapore, Vauld exchange recently froze customers’ funds. Nexo has reportedly offered a buyout but the group also offered to buy out Celsius.
When pressed on whether Zipmex could face the same consequences as Celsius, the source commented that “it’s possible. Babel hasn’t settled their default yet, and it’s a 100 million dollar hole.” Celsius froze users’ funds on June 13 and many fear the exchange could suffer the same fate as Mt. Gox.
In response to the allegations, Lim told Cointelegraph that it was “business as usual.” Lim emphasised that the group “doesn’t comment on rumours.”
However, as per reports from customers of Zipmex and the official Zipmex Twitter account, the firm has since frozen customer withdrawals.
Some cryptocurrencies. Photos: Matichon