Crypto exchange Zipmex goes to court to protect itself from creditors

The lawyers at Morgan Lewis Stamford intend to achieve a moratorium for up to six months while the company develops a restructuring plan

29.07.2022 - 14:40

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2 min

What’s new? On July 22, Asian cryptocurrency exchange Zipmex filed applications with a court in Singapore on behalf of five of its organizations to impose a moratorium on proceedings with creditors. The lawyers at Morgan Lewis Stamford intend to achieve a ban on making lawsuits by borrowers for up to six months while the exchange develops a restructuring plan.

Zipmex’s statement

What do the exchange’s representatives say? Zipmex noted that the six-month moratorium will give time to develop a restructuring plan and raise additional investments, as well as to recover funds from the crypto lender Babel Finance, which had $48 million in claims as of July 21. Another $5 million is owed to the exchange by Celsius Network, a bankrupt DeFi platform, but Zipmex intends to write off that debt.

What is going on with Zipmex? On July 20, the exchange suspended withdrawals, citing “volatile market conditions, and the resulting financial difficulties of our key business partners.” The very next day, it resumed deposit and withdrawal functions, but trading on the platform is unavailable. On July 24, Zipmex received an offer to save the business from an anonymous person. The company did not name its negotiating partner and did not specify whether the offer involved an investment in the platform or its buyout.

Following the suspension of withdrawals, representatives of Vauld, a lending platform, also asked a Singapore court to impose a six-month moratorium on proceedings while the company explores ways to restructure in connection with bankruptcy. Vauld owes creditors a total of $402 million.

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