Thai crypto exchange Zipmex has landed in fresh trouble after an investor missed a $1.25 million payment, rendering its $100 million venture-backed acquisition hanging in balance.
According to a report by Bloomberg News, the $1.25 million payment deadline was on March 23 in order to fund working capital. In the letter, Zipmex stated that if it didn’t receive the funds, it would have to begin the liquidation process for Zipmex Technologies Co. and halt that division’s payroll.
The Thai Securities and Exchange Commission stated in January that it was looking into whether the exchange had broken any local laws when it offered specific digital asset products.
Earlier, US regulator the SEC issued a warning to investors in December, advising them to carefully analyze each arrangement Zipmex had suggested before opting to do business with the trading firm.
Trouble started to brew after crypto lenders Babel Finance and Celsius shut down withdrawals in June 2022, amid market volatility.
Singapore-based Babel paused the withdrawal of coins on June 17 last year. The crypto lender was found to have lost roughly US$280 million worth of Bitcoin and other tokens through failed proprietary trading of customers’ assets.
Zipmex, in order to quell investors’ panic, held a discussion with Babel regarding asset recovery through lawyers.
But the talks failed and this led to the decision of launching legal action against the Singapore firm.
Prior the this, the cryptocurrency exchange said in a Facebook post then outlining the details of the amount of money it lent to both beleaguered crypto lenders.
According to the post, it extended a loan amount of $48 million to Babel, with an additional $5 million to Celsius, which filed for bankruptcy the week prior.
Due to this, Zipmex Thailand, a unit of Singapore-based Zipmex Asia Pte, faced intense regulatory scrutiny last year.
Furthermore, these might have compelled the troubled exchange to cease withdrawals. Even after the Singaporean government provided insolvency protection, investors still could no longer access their money.
Zipmex [ZMT] token Lose Half Of Its Value
Following the news of Zipmex’s funding problems and potential liquidation, the exchange’s flagship token ZMT plummeted by over 50% at the time of writing to just 47 cents.
As per the latest reports, more than 100 employees, or roughly 43% of the workforce, will not be paid this month due to missed payments.
Zipmex is working with its legal team to find alternative financing, according to an email sent to shareholders.
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