The Singapore-based cryptocurrency exchange Zipmex is the most recent in a line of crypto businesses to halt user withdrawals and transactions “until further notice.”
Zipmex Halts Customer Withdrawals
In light of the unstable market conditions, the cryptocurrency exchange Zipmex on Wednesday suspended users from withdrawing their cryptocurrencies.
The exchange announced the decision on Twitter on Wednesday, citing “a combination of circumstances beyond our control.”
Along with other cryptocurrency companies including Celsius Network Ltd. and Vauld, Zipmex has suspended withdrawals, leaving depositors stranded and highlighting the dangers of leveraged bets that are pervasive in the market. Singapore-based cryptocurrency loan and trading platform Vauld is attempting to avoid bankruptcy by selling itself to a rival and requesting legal relief.
According to its website, Zipmex has a license from the Securities and Exchange Commission of Thailand to trade digital assets. Under the new guidelines established by the central bank for companies dealing in cryptoassets, the exchange in Singapore only has an exempted payment service provider authorization.
According to its website, the exchange was established in September 2019 and has offices in Singapore and Thailand. According to CoinGecko data, the company’s native ZMT cryptocurrency has lost almost 90% of its value since its peak.
One of its offerings is ZipUp+, a cryptocurrency account that offers rewards of up to 10% on deposits of coins including Bitcoin, Ether, and Litecoin. On the other hand, Zipmex cautions potential customers on its website that they are not protected because the business lacks a Monetary Authority of Singapore license.
According to a disclaimer on the website, “this means that you will not be able to recover all the money or DPTs you paid to Zipmex if Zipmex’s business fails.”
With subsidiaries in Australia, Thailand, and Indonesia, Zipmex, which bills itself as “Asia’s leading digital assets market,” enables users to trade different cryptocurrencies like bitcoin, ethereum, and its very own Zipmex token.
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Latest Move Is One Of Many
Numerous hedge funds and cryptocurrency lenders, including Three Arrows Capital, Celsius, CoinFLEX, Babel Finance, Vauld, and BlockFi, have all suspended withdrawals like Zipmex due to major liquidity difficulties since Terra’s $40 billion implosion in May. Troubled Celsius filed for Chapter 11 bankruptcy protection last week.
The suspension of investor redemptions was also “temporarily” put in place on Monday by Legion Strategies, a hedge fund connected to Anthony Scaramucci’s Skybridge Capital, which said that “the suspension is largely driven by a liquidity mismatch resulting from late-stage private investments in the fund.”
Legion Strategies maintains that there is “zero risk of any asset liquidation,” despite the fact that a portion of its portfolio is held in cryptocurrency.
Following a powerful bullish breakthrough, Bitcoin rose by over 7% today to reach a five-week high above $24,000. Bulls must maintain control of the market for a parabolic rise to $30K and beyond if crypto-centric companies are to overcome their current financial problems.
BTC/USD trades above $24k. Source: TradingView
One of Thailand’s largest banks, the Bank of Ayudhya, invested in the exchange last year, helping it raise $41 million. As of June, Zipmex was working on a Series B+ funding round that was expected to increase its valuation to $400 million, and Coinbase had agreed to make a strategic investment in the Singapore-based company.
Related reading | BlockFi Quietly Reduces Employees, Offer Buyouts To Force Resignations
Featured image from Shutterstock, chart from TradingView.com