Cryptocurrency trading platform Zipmex faces an uphill battle, forcing the company to file for bankruptcy protection. Earlier this month, the company suspended user withdrawals, although that service has been resumed. It is unclear if all users will be able to get their money out, though.
Zipmex Bites The Dust
It isn’t uncommon for centralized cryptocurrency exchanges to run into financial trouble. More specifically, it often comes down to whether these companies properly segregated customer funds from company money. It seems Zipmex has done so, as users can withdraw funds despite the company filing for bankruptcy protection. However, the filing has some users concerned, as some fear they may be unable to empty their accounts.
Similar to various other crypto entities, Zipmex has been caught up in the Babel Finance/Celsius drama. The company has $53 million in exposure to these firms. However, it seems unlikely that money will ever be fully recorded, leaving a gaping hole to fill. It creates a rather uneasy situation for the company and its users, and hopes to stave off further legal proceedings.
Thanks to these filings, Zipmex now has a 30-day relief period – unless the Singapore Court takes action earlier – to prevent proceedings. Whether that will be sufficient is anyone’s guess. The company has blocked users from directly accessing their coins despite resuming withdrawals after suspending the service earlier this month.
Zipmex operates in various countries, including Singapore, Australia, and Thailand. Interestingly, the Thai Securities and Exchange Commission and local law enforcement have taken a strong interest in this firm. For example, agencies investigate whether the company caused losses for the public when it suspended withdrawals. Things do not look good for the company and its users.