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Just days after pausing customer withdrawals, Singapore-based cryptocurrency exchange Zipmex said it’s received a memorandum of understanding from a potential investor, which could be looking to buy out the firm.
“Our conversations with various interested parties have progressed significantly,” the company said in a tweet, adding that “one of those parties has offered terms in an MOU,” a non-binding agreement that’s often a starting point for negotiations.
Zipmex did not describe the exact nature of the deal or name the prospective buyer, only that it sought “to commence Due Diligence,” which is common in mergers and acquisitions, and enables potential buyers to take a deeper dive on a target company, particularly its financial statements.
📢 Important Announcement 📢
Our conversations with various interested parties have progressed significantly. One of those parties has offered terms in an MOU which includes confidentiality obligations so as to be able to commence Due Diligence. #zipmex— ZIPMEX (@zipmex) July 24, 2022
Zipmex joins the likes of Celsius, Babel Finance, and CoinFLEX, all announcing pauses on withdrawals for customers amid a slump in digital asset prices. Zipmex said in a statement the day after it suspended withdrawals that it has $48 million in exposure to Babel and $5 million in exposure to Celsius.
As the declining price of cryptocurrencies has thrust some companies into financial turmoil, others have stepped in to strike opportunistic deals, including FTX US, recently signing a deal with cryptocurrency lending platform BlockFi that includes an option to buy the company for up to $240 million.
A deal for Zipmex could be on the horizon. According to reports, the company had discussions with Coinbase regarding a potential acquisition in March, but Coinbase instead made a strategic investment. That amount wasn’t disclosed.
Zipmex last week cited “circumstances beyond [its] control” on Twitter in announcing that it was pausing customer withdrawals, blaming “volatile market conditions.”
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
The platform’s native token, ZMT, has declined by nearly 40% to $0.343 today from $0.5637 on July 20, according to data from CoinMarketCap. The exchange has seen nearly $4 million in trading volume over the past 24 hours, with almost 60% of all trades coming from ZMT.
Since announcing the pause, Zipmex has re-enabled customer withdrawals for its Trade Wallet—where users can store crypto and fiat for trading—but Zipmex’s Z wallet, where users can deposit funds to earn bonuses and rewards, remains offline.
Zipmex operates in four different countries—Singapore, Australia, Indonesia, and Thailand—and offers both spot trading for cryptocurrencies and interest on deposits.