Zipmex Rescue Falters as Investor Misses $1.25M Payment

Zipmex’s lifeline is fraying at the edges. The Singapore-based cryptocurrency exchange’s $100 million acquisition by V Ventures, intended as a cornerstone of its restructuring plan, has hit a critical roadblock. According to Bloomberg reports, an investor failed to meet the deadline for a required $1.25 million payment, casting serious doubt on the entire venture capital acquisition. This missed payment represents the latest in a series of setbacks for the exchange, which has been struggling to recover from the cryptocurrency bear market that decimated its operations last year.

The exchange confirmed the development in internal communications, stating it is collaborating with advisors on next steps while acknowledging it has not received a definitive answer regarding “when and whether” the crucial payment will be made. This uncertainty puts the entire $100 million rescue package in jeopardy, leaving Zipmex’s future hanging in the balance. The failed payment comes at a particularly vulnerable moment for the exchange, which has been operating under bankruptcy protection since July 2022.

The financial deterioration at Zipmex has become so severe that the company can no longer meet its basic operational obligations. In an email to staff obtained by The Block, co-founder Akalarp Yimwilai delivered the grim news that Zipmex “is suffering from financial difficulties and we will not be able to pay out full salary for this month of March 2023.” This admission highlights the exchange’s precarious cash position, despite assurances that offices in Thailand, Singapore, and Indonesia currently have the funds necessary to pay wages.

The salary crisis represents just the latest chapter in Zipmex’s downward spiral. The exchange’s troubles began in earnest last year when it was forced to halt withdrawals amid falling cryptocurrency prices, ultimately leading to its bankruptcy declaration in Singapore on July 22, 2022. To temporarily halt legal action against the exchange, lawyers submitted moratoria—similar to U.S. Chapter 11 petitions—providing temporary breathing room that now appears to be running out.

Zipmex’s current predicament stems significantly from its substantial exposure to two major crypto lending collapses. The exchange had $48 million in exposure to cryptocurrency lender Babel Finance and an additional $5 million in exposure to bankrupt lender Celsius. These exposures proved catastrophic during the cryptocurrency market downturn, effectively crippling Zipmex’s financial stability and forcing it into bankruptcy protection.

The relationship with Babel Finance was particularly significant, as Zipmex had hired the lender to manage and supervise investments through its ZipUP and ZipUP+ programs. These programs, which the Bangkok-based exchange launched in October 2020, enabled customers to earn returns on their tokens. The collapse of Babel Finance not only wiped out millions in assets but also triggered regulatory scrutiny that continues to haunt the exchange.

As Zipmex’s financial situation deteriorates, regulatory pressure is mounting. The Securities and Exchange Commission (SEC) of Thailand has launched an investigation into whether the business violated its regulations regarding digital assets. The regulator’s inquiries specifically concern the ZipUP and ZipUP+ programs that have become central to understanding Zipmex’s downfall.

This regulatory probe, which began back in January, adds another layer of complexity to Zipmex’s attempted recovery. The Thai regulator has already criticized Zipmex, and the ongoing investigation threatens additional legal and financial repercussions beyond the immediate crisis of the failed V Ventures acquisition. With operations spanning Thailand, Singapore, and Indonesia, the exchange faces the challenge of navigating multiple regulatory environments while its financial foundation crumbles.