Zipmex, a cryptocurrency exchange operating in markets like Singapore and Thailand, said it halted withdrawals as a series of defaults continues to haunt the digital-assets industry.
In a tweet Wednesday, the company cited “volatile market conditions, and the resulting financial difficulties of our key business partners” as reasons for its decision. A person with direct knowledge of the matter said Zipmex’s pause stemmed from the platform’s exposure to troubled crypto lender Babel Finance. The person declined to be identified as discussing confidential matters. A spokesperson at Babel did not respond to a request for comment.
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.
Zipmex joins crypto firms from Celsius Network Ltd. to Vauld in suspending withdrawals, leaving depositors in the lurch and underscoring the perils of leveraged bets permeating the industry. Vauld, a crypto lending and trading platform based in Singapore, is trying to stave off collapse by seeking relief from courts and selling itself to a rival.
Zipmex has a license for digital asset trading from the Securities and Exchange Commission of Thailand, according to its website. In Singapore, the exchange holds an exempted payment service provider permit, rather than a full license under the central bank’s new regime for cryptoasset firms.
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The exchange was launched in September 2019 and is based in Singapore and Thailand, according to its website. The company’s native ZMT token has tumbled about 90% from its all-time high, CoinGecko data shows.
Among its products is ZipUp+, an account that pays yields as high as 10% on deposits of tokens like Bitcoin, Ether and Litecoin. However, Zipmex warns on its website that prospective users aren’t protected, as the company isn’t licensed by the Monetary Authority of Singapore.
“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.
