Zipmex is seeking bankruptcy protection in Singapore, the Thailand-based cryptocurrency exchange said Wednesday (July 27).
“This helps protect Zipmex against third-party actions, claims, and proceedings while it is active, and enables the team to focus all our efforts on resolving the liquidity situation, without having to worry about defending potential claims or adverse actions while we are doing so,” the company said in a message to its users.
Zipmex added that this does not mean the liquidation of the company, whose status has not changed since its last update. It plans to continue operating its trade wallet, NFT platform and other offerings, with no service interruptions planned.
Related: Thailand’s Zipmex Exchange Halts Withdrawals
According to Zipmex, the company’s lawyers filed five applications under Singapore’s Insolvency, Restructuring and Dissolution Act on behalf of several of the Zipmex entities, seeking “global moratoriums to prohibit and restrain the commencement or continuation of proceedings against the companies for a period of up to six months.”
Zipmex, which also trades in Indonesia, Australia and Singapore, halted customer withdrawals last week, citing “circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners.”
Among the problems: Babel Finance’s default on a $100 million loan. Zipmex said the moratoriums would give it the time to explore options to deal with its liquidity situation, including the pursual of recovery against Babel.
As PYMNTS noted last week, Zipmex is the first exchange impacted by the ripples from the $48 billion collapse of the Terra/LUNA stablecoin in May. The first and largest victim was crypto hedge fund Three Arrows Capital, whose insolvency led to a bulk of the fallout.
The wave of bankruptcies and near misses have triggered enough fear and mistrust in the industry that it is believed to have helped push bitcoin under $20,000 over several weeks.
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