Singapore-based cryptocurrency exchange Zipmex has become the latest firm to crumple under the weight of the crypto winter, as it filed for bankruptcy protection against legal action from creditors.
Zipmex Files for Bankruptcy ProtectionÂ
Last week, it was reported that Zipmex was facing down losses of around $100 million of funds to Babel Finance after halting withdrawals on the platform. The news heightened speculation that the exchange was undergoing a liquidity crisis.
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Confirming the speculation on Wednesday, July 27th, Zipmex announced that the company had filed for bankruptcy protection in Singapore for five of its entities.Â
Under Section 64 of Singapore’s ‘Insolvency, Restructuring and Dissolution Act of 2018′, Zipmex will be protected from the continuation, or commencement of proceedings by claimants for 30 days, or until a court decides.
Zipmex Seeks Time to Resolve Liquidity Issues
By filing for bankruptcy protection, the troubled crypto exchange hopes to buy enough time to resolve its liquidity issues. However, the exchange asserted that the moratorium filing does not mean that the exchange has been liquidated.
Explaining the reasoning behind the filing, Zipmex explained: “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.”
On the Flipside
- The bankruptcy filing comes swiftly after Zipmex announced that it had received investment offers, stating that “conversations with various interested parties have progressed significantly.”
Why You Should Care
Zipmex’s liquidity issues are a combination of the collapses of the Terra ecosystem and crypto hedge fund Three Arrows Capital, as well as the depressed crypto prices seen throughout the last eight months.
Find out more about how the case around Terra’s collapse continues to develop:
South Korean Media Accuses Terra Of Insider Trading
The Three Arrows Capital fiasco has taken another turn. Read the latest update below:
The Race: Three Arrows Capital (3AC) Founders Detained in Dubai Airport
