coincodex.com
Key highlights:
- Zipmex, a cryptocurrency exchange with a presence in the Southeast Asia market, has halted withdrawals
- According to Zipmex, "black swan events" have resulted in difficulties for their key business partners
- Zipmex is the latest in a series of crypto companies that have freezed customer withdrawals since June
Crypto exchange Zipmex halts withdrawals due to "volatile market conditions"
Zipmex, a cryptocurrency exchange that’s primarily targeting the Southeast Asia market, has halted withdrawals, citing “volatile market conditions” and “financial difficulties of our key business partners”. According to the exchange, users will be unable to withdraw their funds “until further notice”.
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
Zipmex joins Celsius, Voyager, Babel Finance, Vauld and others in a series of cryptocurrency businesses that have halted withdrawals amid the turmoil in the crypto markets.
In an email shared by a Zipmex customer, the exchange says that “a series of black swan events in the industry” have caused difficulties for its key business partners.
Another one, rip #Zipmex pic.twitter.com/SVvTUmu2Fh
— Drumi Stoyanov (@Drumiskl) July 20, 2022
The collapse of the Terra ecosystem in May triggered a domino effect in the cryptocurrency industry, which accelerated in June when the price of Bitcoin plummeted towards $20,000 and the prices of most altcoins crashed as well.
The market crash exposed that poor risk management practices and overleveraging were running rampant in the cryptocurrency industry. The most notable “victim” of the crash was crypto hedge fund Three Arrows Capital, which borrowed large amounts to make leveraged bets on the cryptocurrency market. The bankrupt hedge fund owes $3.5 billion to 27 different companies.
On its website, Zipmex is advertising that users can earn an APY of up to 12% on their cryptocurrency holdings by depositing funds into the “ZipUp” product.
Per a source that spoke to CoinTelegraph, Zipmex gave customer funds to crypto lending firm Babel Finance to generate yield. Babel Finance suspended withdrawals from its platform in mid June, citing “unusual liquidity pressures”.
According to reports, Coinbase was considering acquiring Zipmex in the first quarter of this year, but the deal ultimately fell through. However, Coinbase did invest an undisclosed amount into Zipmex in a strategic investment announced in June.