Crypto woes spread as Zipmex halts withdrawals after hit from Celsius, Babel Finance

(Photo: iStock)


Zipmex, a cryptocurrency exchange that operates in Singapore and Thailand, has halted withdrawals as the fallout from a series of defaults spreads further throughout the digital assets industry.

The South-east Asian platform is the latest to succumb to financial difficulties stemming from exposure to troubled crypto lenders Babel Finance and Celsius Network, according to Zipmex (Thailand) chief executive Akalarp Yimwilai.

The exchange is currently in talks with new investors to raise funds for a “bailout”, Mr Akalarp said in a video on the company’s YouTube channel that has since been removed.

Zipmex joins other struggling crypto firms with operations in Singapore, including Three Arrows Capital and Vauld, even as the regulators in the city-state tighten rules to ring-fence retail investors from volatile digital assets. The Monetary Authority of Singapore (MAS) said this week it will broaden cryptocurrency regulations to cover more activities amid a series of business failures in the industry.

Zipmex has a licence for digital asset trading from the Securities and Exchange Commission of Thailand, according to its website. In Singapore, the platform holds an exempted payment service provider permit, rather than a full licence under the central bank’s new regime for crypto asset firms.

Zipmex cited “volatile market conditions, and the resulting financial difficulties of our key business partners” as reasons for its decision, according to a tweet it sent out on Wednesday (July 20). The company later partially eased the withdrawal for its users trading products in Thailand.

Zipmex’s troubles underscore the perils of leveraged bets permeating in a closely interconnected industry between crypto exchanges, lenders, investors and hedge funds. The sector has seen Celsius, Voyager and Three Arrows Capital file for bankruptcy.

Among Zipmex’s products is ZipUp+, an account that pays yields as high as 10 per cent on deposits of tokens such as Bitcoin, Ether and Litecoin, and those customers will no longer be allowed to withdraw their assets and money.

Zipmex said on its website that prospective users are not protected, as the company is not licensed by the MAS.

“This means that you will not be able to recover all the money or DPTs you paid to Zipmex if Zipmex’s business fails,” a notice on the website says, referring to digital payment tokens.

Zipmex began operating in September 2019 and is based in both Singapore and Thailand, according to its website. The company’s native ZMT token has tumbled about 93 per cent from its all-time high, CoinGecko data shows.