Sebastian Sinclair

Troubled Southeast Asia crypto exchange Zipmex is reportedly expected to be acquired by a venture capital firm for about $100 million.



Pending regulatory approval and coming to an agreement on terms, V Ventures has offered to pay $30 million in cash and the remainder in unspecified digital assets, <a href="https://www.bloomberg.com/news/articles/2022-12-02/zipmex-crypto-exchange-to-get-100-million-buyout-from-v-ventures-fund?leadSource=uverify%20wall" target="_blank" rel="noreferrer noopener">Bloomberg reported</a> Wednesday, citing sources familiar with the matter.



The likely acquisition comes as there’s been an uptick in mergers and acquisitions interest, while companies in the region try to fend off declining spot cryptocurrency prices and dwindling big-money interest.&nbsp;



Several crypto firms throughout Asia have also reduced <a href="https://blockworks.co/news/bybit-to-slash-staff-citing-turbulent-markets">employee numbers</a>. Representatives for the exchange and V Ventures did not immediately return requests for comment on the terms of the deal.



A <a href="https://www.youtube.com/watch?v=fpLkoS2vu0Q" target="_blank" rel="noreferrer noopener">video</a> of a Dec. 2 Singapore court proceeding on the matter provided an overview of the offer, without mentioning the potential buyer or detailing specific terms.&nbsp;



The fund, a subsidiary of investment holding company Thoresen Thai Agencies, would retain a 90% stake in Zipmex, whose customers&#8217; funds remain locked on its platform after it filed for bankruptcy protection earlier this year. The Jump Crypto-backed firm was forced to <a href="https://blockworks.co/news/jump-capital-backed-crypto-exchange-suspends-withdrawals" target="_blank" rel="noreferrer noopener">halt withdrawals</a> in July under the strain of a liquidity crunch that has gripped the industry.



In August, the crypto exchange tapped restructuring and financial consulting firm KordaMentha in a bid to oversee its payback scheme.



The firm sought <a href="https://www.bloomberg.com/news/articles/2022-07-25/zipmex-aims-to-raise-at-least-50-million-to-mend-balance-sheet?sref=IIP4JEyu" target="_blank" rel="noreferrer noopener">$50 million</a> in rescue funding from outside parties, attempting to patch a shortfall in purported unpaid loans from lenders Babel Finance and Celsius.



At peak, the firm had roughly 400 employees across Australia, Indonesia, Singapore and Thailand.



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M&amp;A

Troubled Crypto Exchange Zipmex to be Acquired for $100M: Report

<div id="highlights-block_63088abee1cd5" class="highlights">
 <ul>
 <li>Zipmex said it will lay out a recovery plan to government agencies as it seeks to close deals on some much-needed investor funding</li>
 <li>The embattled exchange has also appointed a restructuring and financial firm to hash out its recovery plan</li>
 </ul>
 
</div>



Bankruptcy-shielded crypto exchange Zipmex is attempting to steer its ship back on course following a rocky start to the first six months of the year.



The Southeast Asia firm, which employs roughly 250 people across Singapore, Thailand, Australia and Indonesia, said Thursday it was in the later stages of securing investment from outside parties.



As part of those efforts, the firm also said it has tapped restructuring and financial consulting firm KordaMentha and intends to appoint a “Scheme Manager” to oversee the process.



“We have requested meetings with Thailand’s Securities and Exchange Commission and regulators in the country where we operate to introduce our investors to regulators and present our recovery plan to government agencies,” the exchange said in a statement.



Zipmex made headlines in July when it was forced to <a href="https://cms.blockworks.co/jump-capital-backed-crypto-exchange-suspends-withdrawals/" target="_blank" rel="noreferrer noopener">halt withdrawals</a>, citing a “combination of circumstances” including extreme market volatility and exposure to troubled crypto lenders. 



Thailand’s securities regulator later spun up a web-based form soliciting customer complaints as it stepped in to investigate.



The firm quickly sought <a href="https://www.bloomberg.com/news/articles/2022-07-25/zipmex-aims-to-raise-at-least-50-million-to-mend-balance-sheet?sref=IIP4JEyu" target="_blank" rel="noreferrer noopener">$50 million</a> in additional funding from outside parties, attempting to cover up a shortfall in unpaid loans from lenders, Babel Finance and Celsius.



To date, Zipmex has signed three MOU agreements with investors, according to its statement on Thursday, bringing the exchange closer to getting its hands on some much-needed funding.



An MOU does not constitute a formal agreement and is non-binding, meaning the exchange could find itself in the same position should the deals sour.



A spokesperson for both the SEC and Zipmex did not immediately respond to requests for comment on details of the MOU deals or the exchange’s proposed recovery plans.



Established in 2018, the little-known exchange grew to prominence during the height of crypto’s previous bull market in 2021, to become one of Thailand’s largest digital asset marketplaces by trade volume.



At the time, business appeared to be booming. In August of that year, the exchange secured $41 million in Series B funding with participation coming from one of Thailand’s largest banks, Bank of Ayudhya.



The funding was meant to further develop its tech infrastructure, bring on new business partners and draw in fresh talent. Even Nasdaq-listed exchange giant Coinbase <a href="https://www.theblock.co/post/151004/coinbase-to-make-strategic-investment-in-zipmex-following-acquisition-talks" target="_blank" rel="noreferrer noopener">wanted</a> a piece of the action.



<h3 class="wp-block-heading">Lending woes and millions owed</h3>



Fast forward 12 months and the exchange is fighting to stay afloat.



In July of this year, Zipmex suspended withdrawals and deposits on its platform, later revealing it had burnt a $53 million hole in its balance sheet due to its exposure to some of the industry’s troubled crypto lenders.&nbsp;



It has since reopened withdrawals to <a href="https://www.techinasia.com/zipmex-altcoin-withdrawals" target="_blank" rel="noreferrer noopener">select altcoins</a> including solana, XRP and cardano while withdrawals in bitcoin and ether remain locked in the company’s native wallet.



“I can confirm that we will continue to move forward to resume services,” co-founder Akalarp Yimwilai said in a statement.



Roughly <a href="https://www.bangkokpost.com/business/2354996/explainer-the-lowdown-on-the-zipmex-situation" target="_blank" rel="noreferrer noopener">$48 million</a> in unpaid loans is reportedly owed to Zipmex from Hong Kong’s Babel Finance, with a further $5 million attributed to Celsius — the US-based lender that <a href="https://cms.blockworks.co/celsius-to-file-for-bankruptcy-imminently-report/" target="_blank" rel="noreferrer noopener">filed for bankruptcy</a> last month. 



Despite being a relatively low sum in the greater context of what others in the industry have <a href="https://cms.blockworks.co/voyager-files-for-bankruptcy-days-after-freezing-withdrawals/" target="_blank" rel="noreferrer noopener">faced</a>, it’s been enough to severely impact operations as well as solicit shareholder calls for Zipmex co-founder and CEO, Marcus Lim, <a href="https://www.afr.com/technology/crypto-exchange-boss-refuses-to-resign-after-73m-loss-20220818-p5bb29" target="_blank" rel="noreferrer noopener">to step down</a>. 



While the exchange’s chief has resisted those calls, he conceded last week that if pressured further to do so, he would give up the reins.



“The fact that Zipmex’s withdrawals are limited in Thailand but open in other jurisdictions suggests that it was their Thai customers’ deposits that were affected by exposure to Babel Finance,” Hayden Hughes, CEO of Singapore-based social trading platform Alpha Impact told Blockworks.



Hughes, who also advises for early-stage blockchain and crypto venture capital firm Antler, said investors would need to weigh whether the hole in its balance sheet is small enough to justify bailing out the firm.



At its height, Zipmex offered a 10% yield via its interest-bearing crypto product ZipUp+ which was linked to Babel and Celsius via its lending program.



Both Celsius and Babel halted withdrawals earlier this year following an industry-wide liquidity crunch that came shortly on the heels of a market tailspin, triggered by <a href="https://cms.blockworks.co/tag/terra/" target="_blank" rel="noreferrer noopener">Terra’s</a> demise.



In an effort to allow the exchange to make amends, a Singaporean high court granted Zipmex roughly three months of creditor protection last week as it sees through plans to restructure its business.



The court ruling also granted the exchange protection against <a href="https://www.bloomberg.com/news/articles/2022-08-15/singapore-court-grants-zipmex-three-month-creditor-protection" target="_blank" rel="noreferrer noopener">creditor lawsuits</a> until Dec. 2.



Further information on its restructuring plans are expected in the coming month, Zipmex said. This will include details about online Townhall meetings slated for Sept. 15.



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bankruptcy

Zipmex Taps Restructuring Firm as it Fights To Stay Afloat

Shalini Nagarajan

<div id="highlights-block_62d81babb8e71" class="highlights">
 <ul>
 <li>Volatile markets and business partner struggles led to the withdrawal pause, Zipmex said</li>
 <li>Singapore’s central bank is mulling new rules for consumer protection</li>
 </ul>
 
</div>



Singaporean cryptocurrency exchange Zipmex has frozen withdrawals, indicating that smaller players in the digital asset ecosystem are still struggling with liquidity.



In a <a href="https://twitter.com/zipmex/status/1549699440302166016" target="_blank" rel="noreferrer noopener">tweet</a> Wednesday, Zipmex cited volatile market conditions and financial woes of business partners as the reasons behind its move, echoing recent statements made by fellow Singapore-based firm <a href="https://cms.blockworks.co/tag/vauld/" target="_blank" rel="noreferrer noopener">Vauld</a>.



Zipmex said in a <a href="https://zipmex.com/announcements/system-maintenance-20-july-2022/" target="_blank" rel="noreferrer noopener">separate announcement</a> it was undergoing system maintenance and users wouldn’t be able to execute trades or transactions.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">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.&mdash; ZIPMEX (@zipmex) <a href="https://twitter.com/zipmex/status/1549699440302166016?ref_src=twsrc%5Etfw">July 20, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Vauld announced in early July that it would <a href="https://cms.blockworks.co/vauld-stops-withdrawals-eyes-restructure-after-users-pull-nearly-200m/" target="_blank" rel="noreferrer noopener">suspend withdrawals</a>, trading and deposits. The firm said it would apply to Singapore courts for a moratorium, which is a legal procedure <a href="https://uk.practicallaw.thomsonreuters.com/w-010-9476?transitionType=Default&amp;contextData=(sc.Default)&amp;firstPage=true" target="_blank" rel="noreferrer noopener">linked to insolvency</a>. Vauld’s customer funds are still in limbo nearly three weeks later.



Founded in 2018, Zipmex was most recently looking to grow its presence in Southeast Asia. It already has offices in Singapore, Thailand, Australia and Indonesia. Trading volume on Zipmex in the last 24 hours reached $9 million, according to <a href="https://www.coingecko.com/en/exchanges/zipmex" target="_blank" rel="noreferrer noopener">CoinGecko</a> data.



The company has raised nearly $63 million in funding so far, <a href="https://www.crunchbase.com/organization/zipmex/investor_financials" target="_blank" rel="noreferrer noopener">Crunchbase data</a> shows. Its most recent round was led by <a href="https://cms.blockworks.co/tag/coinbase/" target="_blank" rel="noreferrer noopener">Coinbase</a> in June this year. Coinbase had <a href="https://www.coindesk.com/business/2022/06/09/coinbase-makes-strategic-investment-in-crypto-exchange-zipmex-report/" target="_blank" rel="noreferrer noopener">reportedly</a> wanted to acquire the firm, but instead chose to make a strategic investment instead.



Existing investors include B Capital, MindWorks Capital, Infinity Blockchain Holdings and Jump Capital, the latter of which <a href="https://techcrunch.com/2021/01/11/zipmex-which-aspires-to-build-the-asia-pacific-regions-largest-digital-assets-exchange-raises-6-million-led-by-jump-capital/" target="_blank" rel="noreferrer noopener">led</a> its $6 million funding round last January.



<a href="https://cms.blockworks.co/tag/singapore/" target="_blank" rel="noreferrer noopener">Singapore</a>’s central bank has been weighing <a href="https://cms.blockworks.co/singapore-mulls-limits-on-retail-traders-leverage-after-crypto-collapse/" target="_blank" rel="noreferrer noopener">new consumer protections</a> after stormy markets have kept customers from retrieving their funds. The bank’s managing director, Ravi Menon, said on Tuesday that the city-state has often been viewed as a leading hub for digital assets with clear regulation, but further checks are required. 



“Reviews and public consultations are underway, among international standard-setting bodies and regulators, to strengthen regulation in these areas,” he <a href="https://www.mas.gov.sg/news/speeches/2022/remarks-by-mr-ravi-menon-managing-director-mas-at-the-mas-annual-report-2021-2022-media-conference-on-19-july-2022" target="_blank" rel="noreferrer noopener">told</a> a news conference. “MAS (Monetary Authority of Singapore) is targeting to consult on proposed measures in the next few months.”



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Singapore

Jump Capital-backed Crypto Exchange Suspends Withdrawals

<div id="highlights-block_62259dca1bfe6" class="highlights">
 <ul>
 <li>Asian exchange Zipmex has partnered with polygon in an attempt to capture some of the spoils of the nascent market</li>
 <li>The partnership coincides with Thailand&#8217;s &#8220;first-ever&#8221; metaverse concert by the exchange hosted on Decentraland</li>
 </ul>
 
</div>



Digital asset exchange Zipmex has entered into a strategic partnership with Polygon&#8217;s gaming arm in an attempt to further the exchange&#8217;s metaverse ecosystem across the Asia-Pacific region.



The Singapore-headquartered exchange, which launched its NFT platform Zixel last month, said the partnership with Polygon Studios would help draw in new users as part of its &#8220;long-term strategy&#8221; for future growth, according to a recent press release.



As part of the deal, the firm also said Polygon would be rolling out &#8220;new virtual experiences&#8221; on the metaverse with Zixel, as well as investing in the exchange&#8217;s native token, ZMT. Zipmex&#8217;s product will leverage the Polygon blockchain that purports to be the &#8220;best in class&#8221; solution for energy efficiency and scaling.



The move comes as thousands of companies globally are seeking to expand into virtual worlds in a bid to enhance their brand presence and capture a segment of the potentially lucrative sector. Last week, US retail corporation CVS Pharmacy filed a&nbsp;trademark application&nbsp;to sell “<a href="https://cms.blockworks.co/cvs-files-for-nft-related-trademarks-in-the-metaverse/" target="_blank" rel="noreferrer noopener">downloadable virtual goods</a>” in the metaverse.



&#8220;We look forward to introducing new metaverse initiatives via Zixel&#8230;as well as normalizing crypto and blockchain as part of life in Southeast Asia,&#8221; said Steven Bryson-Haynes, business development head at Polygon Studios.



As part of its announcement, Zipmex’s NFT platform launch has coincided with Thailand&#8217;s &#8220;first-ever&#8221; metaverse concert hosted on Decentraland, as well as a physical metaverse exhibition, to&nbsp;celebrate the launch.



The exhibition, &#8220;Metaworld by Zixel,&#8221; runs until March 20 and allows participants to partake in a number of experiences allowing them to &#8220;explore, create and trade on Decentraland&#8221; in a bid to familiarize new users.



Zipmex is estimated to account for roughly one-quarter of the total revenue of the digital asset market in Thailand, consisting of roughly 1.7 million traders across a number of domestic exchanges, according to a report by the <a href="https://www.bangkokpost.com/business/2229747/zipmex-mulling-asia-pacific-expansion" target="_blank" rel="noreferrer noopener">Bangkok Post</a> last year that cited the country&#8217;s Securities and Exchange Commission.



Around 3.6 million people, or 5.2% of Thailand’s total population, currently own cryptocurrency, according to data by Singapore central bank-compliant payments firm <a href="https://triple-a.io/crypto-ownership-thailand/" target="_blank" rel="noreferrer noopener">Triple A</a>.



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