Singapore High Court Grants Troubled Zipmex 3-Month Relief From Creditors: Report

The Singapore High Court on Monday granted crypto exchange Zipmex protection from creditors until December 2.

Zipmex had asked the court for bankruptcy protection on July 22 and more time for debt restructuring on August 4.

Court Order Affects Thai Investors

Zipmex operates in Singapore, Thailand, Indonesia, and Australia. After it halted withdrawals last month, Thai regulators promptly asked for clarification.

As per media reports, nearly 20,000 local customers have deposited funds with Zipmex through the ZipUp+ service.  

“When a Zipmex Thailand customer chooses to place its crypto asset in the ZipUp+ programme under Zipmex Singapore, they then enter into a new set of terms and conditions with Zipmex Singapore that grant ownership of the crypto asset to Zipmex Singapore,” Jonathan Tang, Zipmex lawyer told the court. 

The court order provides Zipmex protection from customers’ lawsuits asking to unlock their funds.  

Time for Debt Restructure

On August 4, five Zipmex companies approached the Singapore High Court under Section 64 of the Insolvency, Restructuring, and Dissolution Act 2018 and requested five-month protection from creditors to come up with a restructuring and funding plan. 

After hearing the plea on August 15, Justice Aedit Abdullah granted the relief to Zipmex, media reports said. Justice Abdulla had gave a similar three-month relief from creditors’ action to Vauld, a Singapore-registered crypto trading platform that also halted the withdrawals last month.

Part of Meltdown Saga

The problem with Zipmex first came to light on July 20 when it halted withdrawals amid extreme market conditions. In the following weeks, Zipmex reported to the Thai Securities and Exchange Commission (SEC) that it had exposure to Babel and Celcius to the tune of $48 million and $5 million, respectively. 

Both Celcius and Babel faced an extreme liquidity crisis amid a broad market crash. While Zipmex scouted for a fresh deal that could inject liquidity into the company and save it from further stress, customers reported losses due to the firm’s decision to stop the withdrawals. 

Allows Partial Withdrawal

Early this month, Zipmex resumed withdrawals partially – ETH and BTC from August 11 and August 16, respectively, for its Z wallet customers. Before this, the platform had allowed the withdrawal of some altcoins, including SOL, XRP, and ADA.

Zipmex’s lawyer Tang on Monday, explained to the court that the company had received three investment proposals where investors want to inject capital in exchange for a stake.