A Singapore court has provided crypto exchange Zipmex with creditor protection for the next three months, which will allow the company to formulate an efficient funding strategy. According to a report that was just published by Bloomberg, Zipmex had previously requested five months of court protection in order to shield itself from potential legal action brought on by its debtors. The company had previously declared its decision to suspend transactions on the platform, citing turbulent market conditions and the accompanying financial difficulties of its main business partners as the reasoning behind its decision.
According to Bloomberg, the ruling of the court will play a significant role in protecting the company from lawsuits and claims brought by third parties, thereby allowing the exchange to devise a practical method of supporting its operations. The court’s judgment will shield the company from any possible litigation that may result from its month-old announcement to freeze consumer withdrawals and transactions on its exchange. The report adds that Zipmex first sought creditor protection for five months in order to develop a viable finance strategy.
Brainstorming Ideas To Restructure Its Financial Strategies
According to Bloomberg, Justice Aedit Abdullah has issued a temporary restraining order against each of the Zipmex corporations until December 2, 2022. A moratorium is a court-ordered period of delay that allows debtors to defer their payments to creditors until a later date determined by the court. Following this decision, the company will be able to develop a viable funding strategy and restructure its financial strategies in order to repay its creditors on time. This month, Zipmex landed in rocky waters with the announcement that it would cease consumer transactions.
As a result of the continued momentum toward lower prices for cryptocurrencies, the company decided to join the rising number of cryptocurrency exchanges and other companies that have unexpectedly halted all cryptocurrency transactions. In addition to Zipmex, several prominent cryptocurrency exchanges such as Celsius Network and Babel Finance have suspended withdrawals due to the brutal crypto winter. Both companies are now evaluating reorganization options to pay their creditors. In addition, another problematic crypto lender, Vauld, was given a similar suspension in order to fix its liquidity crisis and develop a workable funding strategy.Â
Crypto Firms Succumbing To Market Pressures
Zipmex stated in a press release dated August 2 that the company is “exploring multiple avenues” to acquire funds. Following the signing of a memorandum of understanding (MOU) with two investors, it stated that it is accelerating the due diligence process. Zipmex is one of several cryptocurrency enterprises that have collapsed as a result of the pressures exerted by the market over the past two months. Other companies, such as Celsius Network and Voyager Digital, have filed for bankruptcy, while the hedge fund Three Arrows Capital, based in Singapore, has imploded.
Both Babel Finance and Celsius failed to return the loans they received from Zipmex, totaling $48 million. Zipmex, which was founded in 2018, is a digital asset exchange that enables mass-market digital access to wealth-generating assets. The exchange operates in Australia, Indonesia, Singapore, and Thailand. On July 20, the company announced its plan to freeze withdrawals, attracting a storm of attention from its clients in all regions.
