Southeast Asian crypto exchange Zipmex halts withdrawals

Zipmex, a Thai-based crypto exchange, has halted withdrawals citing a combination of circumstances. The Southeast Asian exchange has halted withdrawals until further notice.

A tweet by the exchange said:

“Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.”

Failed acquisition by Coinbase

Prior to the halting of withdrawals, Cointelegraph had issued reports that Zipmex could be in trouble but the crypto exchange ended up dismissing that as just rumors. This came after a failed acquisition of Zipmex by Coinbase.

Responding to Cointelegraph, the CEO and co-founder of Zipmex, Marcus Lim, said:

“While Coinbase is an interesting partner, an investor makes more sense at this stage.”

Lim went ahead to explain the reason for the failed acquisition saying:

“The acquisition fell through due to market conditions. They’ve pulled out in many countries around the world such as Turkey and in Latin America. Coinbase is a great strategic partner to the business.”

Coinbase had made an offer to acquire Zipmex in the first quarter of 2022 but the acquisition plan fell on June 9. However, Coinbase went ahead to make a strategic investment into the Thai-based crypto exchange.

Other than halting withdrawals, there are reports that Zipmex is planning for a Series B+ that could value it at $400 million.

By August 2021, Zipmex had reached a 200,000 user base with over $1 billion in gross transaction volume since it was launched in 2019.

Zipmex troubles

According to sources some funds, about $100 million from Zipmex were given to Hong Kong-based asset manager Babel Finance with the aim of generating yield. However, there is a risk of default since Babel halted withdrawals in June due to unusual liquidity pressures resulting from the crypto market meltdown and hasn’t resumed the withdrawals.

Though not confirmed, there are fears that Zipmex could go the way of Celsius, which has already filed for bankruptcy seeking financial restructuring.