Another crypto bankruptcy declaration is in the books. Following several straight weeks of bearish trends and companies either liquidating or being forced to declare bankruptcy, it appears another firm has fallen victim to the collapse traders have been witnessing for the past eight months. This time around, the company declaring bankruptcy is Zip Mex, a Singapore-based crypto exchange operating mainly in southeast Asia.
Zip Mex Isn’t Doing So Well
The proceedings occurred through Morgan Lewis Stamford, one of the firm’s main solicitors, via Singapore’s insolvency law. Morgan Lewis initially sought moratoriums on legal proceedings surrounding Zip Mex and several of its entities, which at the time of writing exist in regions like Indonesia, Australia, and Thailand.
With the new bankruptcy filing, it appears these moratoriums can be set in place for approximately 30 days. This means that for about one month, Zip Mex is officially protected from individuals willing to go through great lengths to get their money back. As it stands, the exchange is likely to be out of commission for some time, though Zip Mex has commented its non-fungible token (NFT) market, its trade wallet, and several other products will operate “as normal” with no interruptions.
July 20 also saw a temporary ban on withdrawals, though this ended a few days later. In a statement, the company mentioned:
As we continue to work towards resolving our liquidity situation and re-enabling the Z Wallet for all users, we would like to update our users that last Friday, we submitted moratorium applications in Singapore for all Zip Mex entities. This helps protect Zip Mex against third-party actions, claims, and proceedings while it is active and enables the team to focus all efforts on resolving the liquidity situation without having to worry about defending potential claims or adverse actions while we do so… The moratoriums would give the Zip Mex Group the breathing space and time it requires to explore options to resolve the liquidity situation [including to pursue the recovery against Babel Finance], and to formulate a restructuring plan and secure additional investment to secure the Zip Mex Group’s operations moving forward.
The news follows several other headlines about crypto companies filing bankruptcy. One of the most recent examples comes in the form of the Celsius Network, a crypto lending platform that initially struck negative chords when it announced it was indefinitely suspending all customer withdrawals months ago.
Why Celsius Went Under
Celsius board members explained:
Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers. Without a pause, the acceleration of withdrawals would have allowed certain customers – those who were first to act – to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.