Thai cryptocurrency exchange Zipmex has suspended withdrawals on its platform, with the exchange citing a “combination of circumstances beyond its control” as the reason for the decision.
Coinbase’s Plan To Acquire The Exchange Fell Through
This is coming following a failed acquisition of the business by Coinbase. There is now increased concern that Zipmex could be in a financial mess, but Chief Executive Officer, Marcus Lim, dismissed such “rumors”.
Coinbase planned the failed acquisition of the company in the first quarter of the year. After the acquisition fell through, Coinbase decided to make a strategic investment in the company, although the amount was not disclosed.
At the time, Lim stated that although Coinbase is one of the major that any company would accept for partnership, becoming an investor makes more sense at this period. He noted that the firm has spoken to several parties at that time. Lim stated that the acquisition by Coinbase fell through because of unfavorable market conditions.
He added that the issue was not from Zipmex, but from Coinbase which wants to adjust its business approaches in line with the dwindling crypto market. Coinbase has also pulled out in many countries such as Latin America and Turkey.
Zipmex Plans To Raise More Capital
Zipmex is planning to raise funds in a Series B+ round that could increase its valuation to $400 million.
The company has compliant operations in Australia, Singapore, Indonesia, and Thailand. Zipmex announced last August that its userbase crossed 200,000. Since its launch in late 2019, the firm has announced a growing transaction volume of $1 billion.
Zipmex’s Thai subsidiary has a digital exchange license issued by the country’s Ministry of Finance. However, the parent company is regulated by the Securities and Exchange Commission (SEC).
But the firm could be in trouble after freezing customers’ accounts. A close source who prefers to remain anonymous stated that Zipmex “has a Thai exchange license and an exempt status in Singapore.”
The license agreement prevents the exchange from touching customer funds. The bear crypto market has not exempted any region, as South East Asia has also faced its share of losses. Several exchanges are battling with liquidity while others are freezing customer accounts to prevent drought on their platform.
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