Zipmex asks for extended creditor protection amid talks of a potential takeover

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Blockchain
Zipmex asks for extended creditor protection amid talks of a potential takeover

Embattled Asian crypto exchange, Zipmex, said it is still in talks with an investor seeking to take over the company. According to an anonymous source, the takeover negotiations might be finalized as early as the coming week. The creditor protection extension the exchange has asked for will make it more comfortable in negotiation and help it tie loose ends.

Back story

Zipmex crypto exchange has operating entities in Thailand, Indonesia, Australia, and Singapore. It was one of many crypto companies that gave in to the pressures that came along with the crypto bear market that has accentuated this year.

The crypto exchange gave two loans to two notable crypto companies – Celsius Network and Babel Finance – to the tune of $53 million. None of those loans have been paid because both firms ran into liquidity troubles.

Due to suspected liquidity challenges, Zipmex froze customers’ access to withdrawal in July, but it claimed it was due to market volatility at that time. While the company tries to get its rescue plans right, it has asked for its moratorium in Singapore to be extended till April 2023. This was made known via a statement it released on Friday.

The moratorium is a protection period that holds off creditors from exerting their claims. The company enlisted the service of KordaMentha to help with a recovery plan. KordaMentha is an Australian restructuring company.

Negotiation meltdown

Zipmex’s latest statement addressed to its customers gave an update on its moratorium request in Singapore. It said each Zipmex company applied for their moratorium in Singapore to be extended till the 2nd of April, 2023.

The announcement included a DropBox link that contains copies of the different applications, as well as affidavits. It went ahead to state that only verified Zipmex users would be able to access the documents with a password they were issued before now.

Zipmex was given a three-month moratorium by a Singaporean High Court in August for it to fix its problems before repaying customers and creditors. Bloomberg reported earlier this month that Zipmex was in the advanced stage of a talk to get a bailout from an investor, V Ventures.

V Venture, a venture capital company, did not respond to comment-seeking emails. But the negotiation between both companies has since hit a roadblock. It stresses why Zipmex desperately needs its moratorium period extended as it might not meet the three-month deadline issued by the court.  

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Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.