The issue that came to the fore with the suspension of withdrawals due to liquidity problems. Zipmex has now applied for protection against creditors in Singapore. Zipmex has filed five moratorium applications for this.
Zipmex Claims Protection for Creditors in Singapore
South Asian crypto exchange Zipmex, faced with liquidity problems, decided to suspend withdrawals. Now, the platform’s lawyers have filed five moratorium applications under Section 64 of Singapore’s Bankruptcy, Restructuring and Termination Act 2018 on behalf of several of its organizations on July 22.
In Singapore, a moratorium right arises 30 days after the application is submitted. Zipmex is also now seeking an extension of the moratorium of up to 6 months to prevent the initiation or continuation of legal action against it.
In fact, we saw a similar move in another Asian crypto company, Vauld. Vauld also abruptly stopped customers’ withdrawals. Vauld now owes more than $400 million to creditors.
On the Zipmex side, the exchange stopped withdrawals first. Then it restarted. Currently, it is working to solve the liquidity problem and reactivate Z Wallet for all users.
The following statement was also made by Zipmex regarding the moratorium application:
The moratoriums will give Zipmex ample time to explore options and formulate a restructuring plan to resolve its liquidity situation.
What is a moratorium?
A moratorium is defined as the debtor’s declaration that he cannot pay all or part of his debts due to his inability to pay. At the end of the moratorium, the debt is restructured, mostly between the creditor and the debtor.
