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Zipmex Exchange Faces Liquidation as Buyer Misses Payment

2 mins
Updated by Ryan James
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In Brief

  • Zipmex may need to shut down after acquirer V Ventures failed to pay $1 million.
  • Lawyers have asked for an extension to a moratorium order filed in July 2022.
  • Singapore courts will hear applications regarding restructuring plans on April 30.
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Asian crypto exchange Zipmex faces liquidation after an investor missed a monthly payment.

Venture capital firm V Ventures failed to make a $1.25 million payment on March 23 as part of its $100 million buyout of the embattled exchange.

Zipmex Could Suspend Payroll

According to the letter seen by Bloomberg, Zipmex Technology Co. faces liquidation and cannot pay its workers without the funding. 

Zipmex is reportedly going to consult with advisers on its next steps.

Zipmex filed for bankruptcy in Singapore on July 22 last year, after being forced to pause withdrawals amid declining cryptocurrency prices. Solicitors filed moratoria, which are equivalent to U.S. Chapter 11 filings, to stay legal proceedings against the exchange for several months.

The entities that have sought the moratorium relief in the applications are:

  • Zipmex Asia Pte Ltd
  • Zipmex Pte Ltd
  • Zipmex Company Limited (incorporated in Thailand)
  • PT Zipmex Exchange Indonesia (incorporated in Indonesia)
  • Zipmex Australia Pty Ltd (incorporated in Australia)

Babel Finance and collapsed crypto broker Voyager Digital, which was recently allowed to sell its assets to Binance.US, owe Zipmex $53 million.  

Last month, the exchange’s scheme manager, Australian restructuring firm KordaMentha, asked creditors to vote on a potential acquisition. They were also asked to provide asset balances in their ZWallet that they believe Zipmex owed them, promising to resolve discrepancies through adjudication.

Restructuring Did Not Allow Creditor Committees

In December, the agency warned potential Zipmex creditors to “carefully consider the agreements offered” before signing on the dotted line. It argued that the agreements were discriminatory since the exchange apparently only sent select clientele important restructuring information. 

The exchange did not establish creditor committees to represent creditors in different markets. It argued that the committees, which could require individual legal and advisory staff, would burden the recovery of creditor funds.

In a moratorium update on Wednesday, Zipmex confirmed a court filing to solicit approval for the payout scheme. It also applied for a moratorium extension. Courts will hear the applications on March 30.

Any creditor that wants to attend the hearings must do so through an appointment of legal counsel with rights of audience in Singapore. Anyone affected by the filings can also participate in hearings via Zoom.

The Thai SEC said in January that it was investigating Zipmex for allegedly illegally managing digital asset funds.

Zipmex rival Vauld, which also applied for protection from creditors in July 2022, will see its application for an extension to the order end today. Vauld owes creditors about $402 million.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...