Southeast Asian cryptocurrency exchange Zipmex filed multiple moratorium applications on behalf of its five entities last Friday under Section 64 of Singapore’s Insolvency, Reorganization and Dissolution Act 2018, the company announced today.
Zipmex files for moratorium relief
Moratorium relief protects debtors from legal action by creditors for a specified period. The time-out period gives the debtor more time to think about their options, such as filing for bankruptcy, a trust deed, or a debt settlement plan.
In its official announcement, Zipmex said it is seeking protection from the claims of its creditors and proceedings for up to six months. The company noted that the debt relief period will help its team focus on solving its liquidity issues, adding that it plans to continue serving customers.
“This helps to protect Zipmex against third-party actions, claims, and proceedings when activated, and enables the team to focus all of our efforts to resolve the liquidity situation while we do business.” So, without worrying about defending potential claims or adverse actions,” the exchange said.
Meanwhile, Thailand’s Securities and Exchange Commission (SEC) has reportedly sent a letter to Zipmex, demanding that the company explain its reasons for applying for moratorium relief in a Singapore court. The regulator also wants the creditors to exercise their right to attend the hearing on July 29, 2022.
Produce
Zipmex’s troubles began when the exchange abruptly halted withdrawal services on July 20 due to market volatility and financial problems with its trading partners. Although the firm resumed withdrawals the same day, it came under the radar of Thailand’s SEC.
Following the withdrawal suspension, the regulator sought to know why the exchange had halted certain services and whether it had been in contact with troubled crypto lenders Celsius and Babel Finance.
In response, Zipmex disclosed that Babel and Celsius had $48 million and $5 million at risk, respectively. The exchange said it intends to forgive Celsius’s debt and pursue recovery from Babel.
Meanwhile, Zipmex recently announced that it is in talks with interested parties about a potential deal to help solve its liquidity problems. But that hasn’t stopped the SEC from collecting information from customers who file losses because of the company’s actions.
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