Cryptocurrency exchange Zipmex has requested another extension to its moratorium on debt payments in Singapore due to liquidity issues. The firm has filed a request in Singapore’s courts to extend its existing moratorium period by two months. Zipmex plans to use the extra time to plan and reopen Z Wallet withdrawals.
Zipmex initially filed for a moratorium in July, which allowed the company to postpone payments due to its exposure to Celsius, a cryptocurrency lending platform. The exchange suspended withdrawals earlier that month, while CEO Marcus Lim did not deny reports that the firm was facing insolvency. Singapore’s courts granted Zipmex’s moratorium request, giving the company until December 2022 to come up with a restructuring plan.
However, the platform has continued to request extensions on the moratorium, with the most recent one likely pushing its deadlines to June. In an announcement on April 18, Zipmex said it was in negotiations with investors to “maximize returns for customers” following a delay in payments.
It’s unclear which investor Zipmex was referring to in its latest announcement. In March, venture capital firm V Ventures reportedly did not provide a payment of more than $1 million necessary for Zipmex to avoid liquidating certain operations and stop distributing payroll to employees.
Zipmex’s latest request for an extension highlights the challenges faced by cryptocurrency exchanges in a volatile market. The crypto industry has seen significant fluctuations in value over the past year, with Bitcoin alone experiencing a dramatic rise and fall in value. This has led to liquidity issues for some exchanges, as investors are unable to withdraw funds and pay debts.
The company’s struggles also reflect the broader regulatory challenges facing cryptocurrency exchanges. Many countries are grappling with how to regulate the industry, with some governments taking a more restrictive approach. In Singapore, authorities have implemented strict rules for cryptocurrency exchanges, including requiring them to obtain a license from the Monetary Authority of Singapore (MAS).
Despite these challenges, the cryptocurrency industry continues to attract investors and users around the world. While some exchanges may struggle, others are thriving, and the industry as a whole shows no signs of slowing down. However, as the Zipmex case demonstrates, investors and exchanges must navigate a complex landscape filled with uncertainty and risk.