Zipmex, a cryptocurrency exchange focused on Southeast Asia, has declared bankruptcy in Singapore, becoming the latest victim of the global decline in digital currencies.
Zipmex announced on July 25 that its lawyers had filed five applications seeking moratoriums to restrict judicial procedures against Zipmex for up to six months.
The Singapore-based crypto company has resumed withdrawals a week ago, one day after suspending them on July 20, and stated it was addressing its $53 million exposure to crypto lenders Celsius and Babel Finance.
In accordance with Singaporean legislation, such a filing allows companies an automatic 30-day moratorium, or until a Singaporean court rules on the case, whichever comes first.
The Securities and Exchange Commission of Thailand announced on Monday that it was collaborating with law enforcement to investigate potential public losses after Zipmex briefly banned withdrawals.
According to its website, Zipmex, which also operates in Thailand, Indonesia, and Australia, is the latest in a string of global crypto players to have difficulties following a dramatic sell off in markets that began in May with the collapse of two paired coins, Luna and TerraUSD.
Singapore's grandiose cryptocurrency industry, by some metrics the largest in Asia-Pacific, has also been rattled by the recent failure of the cryptocurrency investment fund Three Arrows Capital.
The crypto exchange will continue to run its Trade Wallet, NFT platform, and other products, so consumers should not anticipate any service disruptions.
The filing is an attempt by the exchange to overcome its liquidity concerns and re-enable its Z wallet, hence the moratorium.
Several crypto companies have suspended withdrawals, faced liquidity challenges, or, in the most extreme circumstances, filed for bankruptcy as a result of the bear market.
Celsius Network and Three Arrows Capital are two of the most prominent victims of the crypto turmoil, not to mention Terraform Labs, which faces serious legal issues.
As a result of the bear market's cascading effect, several crypto-related companies will adopt a more cautious strategy moving forward.
The cryptocurrency market has seen similar difficulties in the past, but at the current level of adoption and scale, it is very unpleasant for the market.
In a report, the Boston Consulting Group said there could be as many as 1 billion crypto users by 2030. Boston Consulting also said the crypto industry mimics the internet of the early 1990s and there is significant possibility for expansion.