key takeaways
- Zipmex has halted customer withdrawals, citing volatility in the cryptocurrency market.
- The exchange announced the update in a tweet, confirming that withdrawals will be stopped “until further notice.”
- Zipmex is one of several firms that have blocked clients from accessing their deposited funds in response to the market crash in recent weeks.
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Zipmex announced the update in a Wednesday tweet, saying that withdrawals would be halted “until further notice.”
Zipmex Stops Customer Withdrawals
Zipmex has become the latest cryptocurrency firm to resort to drastic measures to combat the market downturn.
The Asian firm on Wednesday announced that it has halted customer withdrawals due to market volatility and other factors. a tweet Read from the company’s official account:
“Due to a combination of circumstances beyond our control, including volatile market conditions, and the resulting financial difficulties of our major trading partners, in order to preserve the integrity of our platform, we will hold withdrawals until further notice.”
Zipmex styles itself as “Asia’s leading digital asset exchange” and gives customers access to assets such as bitcoin, ethereum, and its own Zipmex token. According to the Zipmex website, customers can enjoy rewards of up to 12% per annum by depositing their funds on the platform. For example, the exchange claims to offer 10% annualized returns on USDC and 6% on Bitcoin and Ethereum, although it does not explain how it generates the yield.
The firm raised $11 million in a Series B funding round in March and most recently received an investment from Coinbase (the US exchange initially explored a potential takeover, but the deal fell through).
Zipmex is one of several crypto-focused firms that have faced challenges in the wake of the market crash. Accelerated by major events such as the collapse of Terra and the liquidity crisis of Three Arrows Capital, most crypto assets have fallen in value over the course of the year.
As a result, Celsius, Voyager Digital, CoinFlex, Wold and Babel Finance have all taken similar steps as Zipmex to deal with their own liquidity issues, pausing withdrawals as they seek to collect funds to make their clients whole. do struggle. Last week, Celsius filed for Chapter 11 bankruptcy in New York. Like Zipmex, the firm promised customers higher returns than traditional banking services.
The decision to stop customer withdrawals is important because it effectively prevents customers from accessing their money. As Zipmex has given no indication of when it plans to reopen withdrawals, thanks to a note that they have been put on hold “until further notice,” today’s update is for the exchange’s customers. Bad news for
Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.