Singapore Court Approves Zipmex Request for Three-Month Creditor Protection

Updated by Geraint Price
In Brief
  • Zipmex resumed its operations last week after it suspended them last month.
  • The crypto exchange has asked for bankruptcy protection in Singapore.
  • Zimpex will consult with regulators and develop a strategy to address its exposure to Babel Finance and Celsius.
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Zipmex has been granted three months creditor protection by the court of Singapore, giving the exchange time to consult with regulators and develop a strategy to address the exposure of $53 million from crypto lenders Babel Finance and Celsius.

This comes days after the platform filed for bankruptcy protection to focus on solving liquidity issues. Zipmex also said that it would be resuming operations last week after last month’s suspension.

The exchange is focused on Southeast Asia and is one of the latest hit by the crypto crash. The platform resumed withdrawals for some altcoins this week after it was forced to halt operations abruptly last month. The platform did not mention anything about Bitcoin (BTC) or Ethereum (ETH) withdrawals.

According to Bloomberg, Zipmex is one of at least three cryptocurrency exchanges that have filed for bankruptcy protection in recent weeks.

Zipmex battle with Babel Finance

A recent announcement by Zipmex shows that the crypto lender is now seeking $53 million from the exchange, shedding new light on its battle. In a meeting on July 20, the two parties revealed that it is Babel that is owed $53 million by Zipmex, and not the reverse.

After the meeting with Babel, the platform immediately reported the situation to the Securities and Exchange Commission in Thailand (SEC). The move allows Zipmex to take a breath and focus on its operations, reported Bloomberg.

The firm’s various entities filed five applications for moratoriums on legal actions on July 22, according to the Asset Protection Group of Zipmex’s solicitors, Morgan Lewis Stamford.

The guarantee provides Zipmex “a shield from third-party actions, claims, and lawsuits while the arrangement is in effect, allowing us to focus all of our efforts on resolving the liquidity situation without having to worry about defending possible claims or adverse actions.”

According to Zipmex, this helps prevent it from being sued by third parties during the agreement’s duration.

On Thursday, Zipmex announced it was in talks with Babel Finance to resolve the troubled lender’s debt. It also said it would write off Celsius’ debts. The company is also considering legal action and restructuring as a result of these events.

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