Zipmex, a cryptocurrency exchange that operates in Singapore and Thailand, has halted withdrawals as the fallout from a series of defaults spreads further throughout the digital-assets industry.
The Asian platform is the latest to succumb to financial difficulties stemming from exposure to troubled crypto lenders Babel Finance and Celsius Network Ltd, according to Zipmex (Thailand) chief executive Akalarp Yimwilai.
- Related: Zipmex suspends withdrawals
The exchange is currently in talks with new investors to raise funds for a “bailout,” Akalarp said in a video on the company’s YouTube channel that has since been removed.
Zipmex joins other struggling crypto firms with operations in Singapore, including Three Arrows Capital and Vauld, even as the regulators in the city state tighten rules to ring-fence retail investors from volatile digital assets. The Monetary Authority of Singapore said this month it will broaden cryptocurrency regulations to cover more activities amid a series of business failures in the industry.
Zipmex has a license for digital-asset trading from the Securities and Exchange Commission of Thailand, according to its website. In Singapore, the platform holds an exempted payment service provider permit, rather than a full license under the central bank’s new regime for cryptoasset firms.
Zipmex cited “volatile market conditions, and the resulting financial difficulties of our key business partners” as reasons for its decision, according to a tweet it sent out Wednesday. The company later partially eased the withdrawal for its users who were trading products in Thailand.
Zipmex’s troubles underscore the perils of leveraged bets permeating in a closely interconnected industry between crypto exchanges, lenders, investors and hedge funds which has seen Celsius, Voyager and Three Arrows Capital file for bankruptcy.
Among Zipmex’s products is ZipUp+, an account that pays yields as high as 10% on deposits of tokens such as Bitcoin, Ether and Litecoin, and those customers will no longer be allowed to withdraw their assets and money. Zipmex said on its website that prospective users aren’t protected, as the company is not licensed by the MAS.
“This means that you will not be able to recover all the money or DPTs you paid to Zipmex if Zipmex’s business fails,” a notice on the website says, referring to digital payment tokens.
Zipmex began operating in September 2019 and is based on both Singapore and Thailand, according to its website. The company’s native ZMT token has tumbled about 93% from its all-time high, CoinGecko data shows.
