[UPDATED] Babel Exposure Might Have Caused Zipmex’s Downfall

Updated: 5:00pm, 21/07/22

Zipmex has since announced it will re-enable withdrawals and deposits later this evening. “We are extending our maintenance period and will re-enable withdrawals and deposits for your Trade Wallet on 21 July 2022 at 18:00 (GMT+7). Trading will remain disabled until further notice,” the firm tweeted.

Updated: 12:58pm, 21/07/22

Things aren’t looking good for customers of Singapore-based crypto exchange Zipmex, which has paused customer withdrawals to “maintain the integrity” of the platform.

The exchange sent an email to customers on Wednesday, citing “volatile market conditions” and financial difficulties of key business partners.

However, according to a report by Coindesk, which cited two industry executives briefed on the matter, Zipmex’s difficulties link back to troubled crypto lender Babel Finance, which is staring down a nine-figure loss amid crashing crypto prices.

Zipmex has a digital asset license in Thailand, where it operates its brokerage. The country contributes to about half its business. The exchange isn’t licensed in Singapore but holds an exempted payment service provider permit.

Last year, Zipmex raised US$41 million in a Series B fundraising round led by Krungsri Finnovate, the venture capital (VC) arm of Bank of Ayudhya PCL. Other investors include SET-listed multimedia companies Plan B Media PCL and Master PCL, Hong Kong-based VC MindWorks and returning VC investor US-based Jump Capital. At the point of its raise in August 2021, the company said it serves almost 1 million clients who had transacted over US$4 billion.

As contagion spread across the crypto sector in recent weeks, customer withdrawals had also been paused at platforms including Babel, Celsius, Vauld, and more. None have resumed customer activity.

Zipmex is currently trying to avoid liquidation by seeking relief from courts and selling itself to a rival.