Zipmex seeks $50 mn after freezing crypto withdrawals: Report

Crypto exchange Zipmex is seeking to raise about $50 million to repair its balance sheet, the company confirmed the targeted fundraising amount in an emailed response to questions from Bloomberg.

The Asia-focused cryptocurrency exchange that froze some withdrawals last week said that it is in discussions to sell all or part of itself after lending money to troubled crypto firms – Babel Finance and Celsius Network Ltd. 

Celsius and Babel Finance are among several cryptocurrency players that have fallen into difficulties in recent months.

Taking to Twitter on Sunday, Zipmex stated that one of “various interested parties” it’s held talks with has “offered terms” in a memorandum of understanding, without identifying the entity.

The fundraising target roughly represents Zipmex’s combined exposures to Babel and Celsius, which stand at $48 million and $5 million, respectively. 

Zipmex was derailed by the daisy chain of defaults that’s rippled through the highly interconnected market for crypto lending and borrowing following a $2 trillion rout in digital assets. 

Celsius filed for bankruptcy earlier in July and Babel has tapped restructuring advisers. 

Thailand probes potential losses for users of Zipmex

Thailand’s Securities and Exchange Commission said today it was working with law enforcement to look into potential losses among the public after Zipmex temporarily suspended withdrawals last week.

The SEC said in a statement it was asking impacted users of Zipmex to submit information via an online forum on how they had been affected by the problems at the platform.

The announcement comes as crypto trading in Thailand has slowed and after Thai lender SCB X Pcl said it was extending the due diligence period for its $537 million acquisition of Thai crypto exchange, Butkub.

Zipmex operates in Thailand, Singapore, Indonesia and Australia. It 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.

Among its products is ZipUp+, an account that pays yields as high as 10% on deposits of tokens like Bitcoin, Ether and Litecoin. Withdrawals from that product are still frozen. 

“We have been engaged with the SEC and other government agencies to provide them with all required documents,” a Zipmex spokesperson reportedly said.

Zipmex holds a digital asset exchange and a digital asset broker license, the SEC website shows. At the weekend, the company said in a Facebook post it was exploring a deal with an “interested party.”

Zipmex is the latest to encounter financial difficulties following a sharp sell off in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD.

With agency inputs

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