Digital asset exchange Zipmex announced on Wednesday that it has paused withdrawals on its platform until further notice due to what it described as “combination of circumstances” beyond its control.
The Singapore-based startup, which also operates in Australia, Thailand, Indonesia, and Singapore, said in a tweet on Wednesday that “volatile market conditions” and the “resulting financial difficulties” of its business partners prompted it to make the decision to halt withdrawals.
Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.
— ZIPMEX (@zipmex) July 20, 2022
Founded in 2019, Zipmex, backed by Thailand’s Bank of Ayudha, has roughly 2 million users on its platform who can buy, sell, and earn interest on bitcoin, ethereal, and other crypto tokens.
A Bloomberg report said the decision stemmed from the platform’s exposure to troubled crypto lender Babel Finance.
Hong Kong-based Babel Finance also temporarily suspended withdrawals and redemption of crypto assets in June as it scrambled to pay its clients after the recent slump in the digital currency market.
Zipmex’s withdrawal announcement also came a month after its acquisition talks with Coinbase fell through. The US-based crypto exchange had intended to acquire Zipmex but ended up with a strategic investment.
CEO and co-founder Marcus Lim, however, told Cointelegraph that the bear market was the reason why Coinbase opted out of the acquisition. He also denied rumors that Zipmex was in trouble.
Prior to the announcement, Zipmex was reported to be working on a Series B+ that could value it at $400 million.
Earlier in March, DealStreetAsia’s DATA VANTAGE showed that Zipmex welcomed Black Bull Capital Partners and Vision Invest as new shareholders. The two entities acquired shares in Zipmex through secondary transactions, providing an exit to two shareholders.
A few days later, Zipmex also received $1.2 million in new capital, bringing the total funding in the company to more than $60 million.
In August last year, Zipmex bagged $41 million in an oversubscribed Series B funding round from investors including Krungsri Finnovate Company Limited, the corporate venture capital arm of Bank of Ayudhya.
Lim recently said the company planned to make a foray into Vietnam, a market with the highest adoption of cryptocurrencies. Vietnam ranked first, among 154 countries, in the Global Crypto Adoption Index launched last year by the crypto analytics firm Chainalysis.
Zipmex now joins the like of Babel Finance and other crypto platform that have paused withdrawals. In June, US-based retail crypto lending platform Celsius Network also froze withdrawals and transfers between accounts “to stabilize liquidity” as the collapse of cryptocurrency TerraUSD in May triggered a rise in redemptions.