Zipmex's rescue plan may face some challenges, as investors in the cryptocurrency exchange are now demanding a small portion of its debt, rather than committing to a 100% payment. Meanwhile, the struggling company is planning to further expand its creditor protections as it seeks new investors.
As stated in a letter the company wrote to the court in charge of its restructuring, investors in Zipmex proposed paying creditors of the Thai cryptocurrency exchange about 10% to 20% of what they owed. The new offer from investors is very different from the original takeover proposal, which promised full payment to creditors.
The letter, seen by Bloomberg, said investors wanted to cut payments to creditors because Zipmex did not meet the conditions set out in the original takeover proposal. While it did not name the investors, an anonymous source said the unnamed entity was venture capital fund V Ventures. As previously reported, V Ventures signed a deal with Zipmex in December 2022 to acquire a 90% stake in the struggling crypto exchange for $100 million in cash and crypto tokens. The encrypted portion of the payment was supposed to gradually unlock customers' frozen wallets by April 2023.
However, Zipmex did not receive a fourth payment due from its investors on March 23, 2023, worth $1.25 million. This amount is intended to be used to fund working capital. In July 2022, Zipmex, which has branches in Thailand, Singapore, Indonesia and Australia, halted withdrawals on its platform after approaching troubled cryptocurrency lenders Celsius and Babel Finance worth $53 million. Shortly thereafter, Zipmex sought bankruptcy protection from its creditors, and in August 2022 it received a three-month creditor protection from the Singapore High Court, allowing it to propose a debt restructuring plan.
Meanwhile, Zipmex's latest creditor protection extension expires in a few days on April 23. As stated in the letter, following the investor’s latest developments, the cryptocurrency exchange is seeking court approval for another creditor extension so that it can seek replacement investors. Amid Zipmex’s troubles, Thailand’s Securities and Exchange Commission (SEC) has reportedly launched an investigation into the company’s activities, looking into whether the cryptocurrency exchange violated any local laws.
