Zipmex creditors offered 3.35 cents on the dollar payout

Zipmex, a Thai crypto exchange grappling with financial difficulties, has proposed a restructuring plan to repay its creditors.

Zipmex Thailand

The rescue plan involves an initial payout of approximately 3.35 cents per dollar of claims, with the possibility of increasing the repayment to as much as 29.35 cents per dollar. This contingent increase depends on the successful recovery of funds under the revised restructuring strategy.

The company, which filed for bankruptcy protection in Singapore in 2022, has been working to manage its debt of $97.1 million. The financial woes of Zipmex were exacerbated by its $53 million exposure to troubled crypto lenders Babel Finance and Celsius. The exchange has since been seeking court extensions for a moratorium on its debt to strategize its recovery and repayment plan.

However, the proposed restructuring scheme has met resistance from major creditors, who are calling for an independent review of the company’s liabilities. Zipmex CEO Marcus Lim commented on the restructuring plan, noting inaccuracies in the figures reported by Bloomberg but without confirming the specific details of the proposal.

The creditors are expected to vote on the current restructuring plan in early December. Meanwhile, Zipmex announced the suspension of all digital asset trading in Thailand by January 31, 2024. The exchange has been under investigation by Thailand’s Securities and Exchange Commission since early 2023, adding to its regulatory and financial challenges.

Based in Singapore, Zipmex operates across Thailand, Australia, and Indonesia, but it has come under scrutiny by Thailand’s SEC. The issues involve allegations of improper use of a digital asset custodian service by Zipmex Thailand and accusations that the company directed customers towards the Singapore-based exchange Zipmex Pte, raising conflict of interest concerns.

The exchange’s troubles are compounded by its struggle to repay creditors following losses tied to crypto lenders Babel Finance and Genesis. A potential $100 million buyout deal that could have offered some relief to Zipmex fell through earlier this year when the prospective buyer, V Ventures, withdrew.

Further complicating the situation, on January 10, Zipmex was subject to a new investigation by the SEC of Thailand over potential violations of local rules. The following day, the exchange faced a deadline to confirm or deny to the SEC whether it had been operating as a digital asset fund manager without the necessary authorization.

The SEC’s scrutiny of Zipmex is not new; it began months ago. In September 2022, the SEC lodged a police report against Zipmex and its co-founder, Akalarp Yimwilai, for alleged noncompliance with local laws. Specifically, the SEC pointed out that Zipmex failed to provide required information on digital wallets and crypto transactions as mandated by the country’s Digital Assets Act.