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Zipmex to Likely Allow Customer Withdrawals After Securing Rescue Deal
Trouble crypto exchange Zipmex could restart withdrawals after a "rescue" deal is closed.
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Beleaguered crypto exchange Zipmex is reportedly close to signing a rescue deal with a VC firm, allowing the company to restart customer withdrawals. Eligible creditors must fill out a form by Feb. 21, with plans to finalize withdrawals over the next month.
Creditors Must Fill Out Forms by Feb. 21
Crypto exchange Zipmex will reportedly restart customer withdrawals after inking a deal with a venture capital (VC) firm in January. According to Zipmex’s announcement last week, their scheme manager KordaMentha asked all eligible creditors to submit a form with the owed amount by Feb. 21. The firm plans to finalize withdrawals by Mar. 21, the announcement added.
Zipmex said the creditors will get back “100% of their digital assets in the Z Wallet once we give full access to Z Wallets upon approval of the scheme and any investment deals are closed.”
The move comes several months after Zipmex said it was holding advanced talks to secure a rescue deal. However, there has been no official confirmation that a deal has closed.
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Zipmex’s Woes Continue
Zipmex filed for bankruptcy in June 2022 due to the contagious collapse of the algorithmic stablecoin TerraUSD (UST) and its sister token LUNA. The implosion caused a knock-on effect on several high-profile crypto projects, including Babel Finance and Celsius Network. Zipmex issued two loans totaling $53 million to these two crypto firms, neither of which has been repaid.
Specifically, Zipmex issued $48 million and $5 million debt to Babel and Celsius, respectively. Both crypto firms halted withdrawals in June amid the crypto market downturn.
To make things worse, Thailand’s Securities and Exchange Commission (SEC) investigated Zipmex in January, claiming the Singapore-based crypto exchange may have been operating as a “digital asset fund manager without permission.” According to Bloomberg, the probe particularly focuses on Zipmex’s ZipUP and ZipUP+ programs.
Do you think Zipmex has handled its restructuring process well so far? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
