Official Statement from Zipmex
July 22, 2022
Just now, trade wallet withdrawals were re-enabled for our Global and Singapore users.
We’re working diligently with our partners so as to re-enable our withdrawal functionality to all users who have assets in their Z-wallet (subscribers to ZipUp+).
ZipUp+ (the Zipmex CeFi Solution)
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 our institutional borrowers. Since the beginning of this year, we 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, our operations were not materially affected, and we have in place a viable path to resolution. On 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 our exposure to Celsius Network and Babel Finance has been grossly exaggerated. We 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
Recovery in progress
Zipmex remains committed to transparency. Our customers and our community are and always will be our priority.
When the news broke on Wednesday, we were already in discussion with Babel Finance on ways to resolve this liquidity situation. These discussions are ongoing. 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.
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.
What happens next?
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.
Let us reiterate:
Withdrawals using the Zipmex Trade Wallet are not affected.
We’re working around the clock to address the liquidity issue so we can re-enable withdrawals from users’ ZipUp+ wallets as soon as possible. We apologize for the uncertainty and frustration this event has caused.
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.