Zipmex, a Thai cryptocurrency exchange currently facing financial difficulties, has proposed a restructuring plan that includes paying creditors a fraction of their original claims. According to Bloomberg, the initial claim amount offered by the exchange to creditors is “about 3.35 cents on the dollar.”
The proposal forms a key part of the company's restructuring strategy as it grapples with $97 million in debt owed to customers.
Restructuring plan and creditor response
The restructuring proposal, while providing some relief, is far less than the total amount owed. Zipmex's move to offer such a percentage of repayment reflects its current financial challenges.
The company's chief executive, Marcus Lim, did not confirm specific details of the restructuring plan but noted discrepancies in figures reported in the media.
Zipmex’s main creditors have expressed dissatisfaction with the proposed repayment plan, according to Bloomberg. They have called for an independent review of the company’s assets and liabilities, suggesting they lack confidence in the numbers.
The proposal also suggests increasing repayments from 3.35 cents to 29.35 cents per dollar, but that would depend on the "recovery" of the company's financial condition.
Zipmex struggles for stability
Zipmex’s financial woes became public in August 2022 when the company filed for bankruptcy protection in Singapore, citing difficulties caused by its $53 million exposure to cryptocurrency lenders Babel Finance and Celsius. The move came after the exchange suspended withdrawals in early July.
In the months that followed, Zipmex faced continued challenges navigating a complex financial environment. The exchange made multiple requests to the Singapore courts for an extension of its debt moratorium, reflecting the precariousness of its financial position.
The outcome of a creditors’ vote on the proposed restructuring plan is expected in early December, according to Bloomberg, highlighting the critical moment for Zipmex.
To make matters worse, Zipmex recently announced that it would suspend its trading operations in Thailand. The decision, effective from 1:00 pm on November 25, 2023, is intended to ensure compliance with the regulatory framework established by the Securities and Exchange Commission of Thailand (SEC).
Zipmex’s official statement elaborated on the necessity of this suspension, emphasizing compliance with SEC regulations and standards. In light of this suspension, the exchange has advised customers of alternative withdrawal procedures. The company said in the statement:
After January 31, 2024, when the company suspends withdrawals through the website and mobile application, customers will need to contact customer support to make withdrawals.
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