Digital Asset Platform Zipmex Working with Partners to Re-Enable Withdrawals

The team at Zipmex noted in an update on July 22, 2022 that “just now, trade wallet withdrawals were re-enabled for our Global and Singapore users.’

Zipmex further revealed that they’re “working diligently with [their] partners so as to re-enable [their] withdrawal functionality to all users who have assets in their Z-wallet (subscribers to ZipUp+).”

Due to current macroeconomic conditions and the recent fallout in the crypto space from recent events concerning Celsius Network, 3AC, Babel Finance, and others, Zipmex’s CeFi product has recently “been exposed to defaults from two of [their] institutional borrowers.”

Since the beginning of this year, they have been “able to retrieve the majority of these funds and assets historically deployed with our various partners and have been actively working to resolve the situation.”

Up to this point in time, their operations “were not materially affected, and we have in place a viable path to resolution.” This past Wednesday evening, platform-wide withdrawals “were paused in order to protect our customers and to ensure our products remain viable and safe.”

The size of their exposure to Celsius Network and Babel Finance “has been grossly exaggerated,” the company claims. They would “like to correct some misleading information that is currently circulating in the press.”

As of the 21st of July, we are currently owed a net amount of:

  • $48 million USD by Babel Finance
  • $5 million USD by Celsius Network

Zipmex remains ‘committed to transparency.” Their customers and their community “are and always will be [their] priority.”

When the news broke on Wednesday, they were “already in discussion with Babel Finance on ways to resolve this liquidity situation.”

These discussions “are ongoing.”

The company added:

“We are currently evaluating our options, based on the outcomes of these negotiations. Dialogue between Zipmex and Babel Finance remains open and we are committed to a solution. Our loan to Celsius Network was minimal and we intend to write off this loss against our own balance sheet.”

They also mentioned

“While ZipUp+ has received much press attention due to the high APY offered, it is not central to our exchange operation, NFT platform, WEB3, and Metaverse projects. We are not a predominantly CeFi company. We are a “digital asset platform” and as such remain invested and operational in a multitude of other blockchain-based projects.”

They further noted:

“Because the negotiations have not yet been concluded, we don’t have a cut-and-dried answer yet. Zipmex is exploring all available channels. This includes capital raises and internal restructuring. For the moment, Zipmex continues to operate the Trade Wallet, NFT platform, and other products as normal.”

Withdrawals using the Zipmex Trade Wallet “are not affected.”

The company confirmed that they are ‘working around the clock to address the liquidity issue so we can re-enable withdrawals from users’ ZipUp+ wallets as soon as possible.”

They apologize “for the uncertainty and frustration this event has caused.”

The firm concluded:

“We will continue to engage in open dialogue with our community, local regulators across all our markets, and all impacted parties. Our users are a priority and we are striving to restore all functionality to the platform while being as transparent as possible. We thank you for your patience while we are working to resolve this issue and for your continued support.”

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