Singapore-based crypto exchange Zipmex has just announced a pause in the withdrawals of users’ funds till further notice.
Zipmex Halts Withdrawals
The company noted in the announcement that the move was made as a result of factors such as the current state of the crypto market and the financial constraints of its partner institutions.
Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.
— ZIPMEX (@zipmex) July 20, 2022
Coinbase Makes Strategic Investment in Zipmex
Coinbase reportedly had plans to acquire Zipmex but eventually opted for an investment in the company. The partnership, which was disclosed last month, was to be part of a $40 million SeriesB+ fund round for the Thailand exchange for an undisclosed amount. It is alleged that crypto lender Babel Finance may have been included in the funding round, but no official comments were made.
Due to the market downtrends, Coinbase laid off 18% of its headcount representing 1,100 workers, as per a mid-June report. Babel Finance, on the other hand, has had to halt the withdrawals of users’ funds, similar to the recent action of Zipmex.
Crypto Winter Shakes Companies
The latest development puts Zipmex on the bandwagon of crypto companies that have halted withdrawals in the crypto winter.
A foremost example is crypto lender Celsius Network, which, for over a month, suspended withdrawals of users’ funds and is still yet to release funds. Meanwhile, the company filed for Chapter 11 bankruptcy protection last week.
However, the insolvent state of Celsius Network could be a result of poor risk management, as Timothy Cradle, a former employee at the firm, acknowledged that the company had been involved in some risky investments.
Other companies such as CoinFLEX, Vauld, Three Arrows Capital (3AC), and others, have either paused withdrawals of users’ funds or gone bankrupt altogether.
Despite the extreme volatility in the crypto market, some companies have increased their rate of acquisitions and investments in other firms. Two key examples of this are crypto exchanges Binance and FTX. Binance declared in June that it would increase hiring, mergers & acquisitions (M&A). FTX, for its part, invested in crypto lender BlockFi.
