Official Statement from Zipmex
August 02, 2022
1 August 2022
Zipmex would like to clarify the situation we faced over the past week to provide transparency for customers, investors, the public, the media and all other parties. It also serves to present the facts and our point of view.
As always, Zipmex is committed to transparency and honesty. Where misunderstandings and misinterpretations arise, we aim to resolve them quickly and openly so that we can move forward as a community.
The following is a statement from Dr. Akalarp Yimwilai, one of the founders of Zipmex and a director of the Zipmex group’s parent company Zipmex Asia Pte Ltd.
“I would like to thank all our customers, the media and everyone who has supported us. The information I will provide today is to clarify aspects of the complex situation we are facing. I wish to also reiterate my own sincerity and dedication to resolving the situation, as well as that of the Company and the rest of the Zipmex group.
We remain deeply committed to expediting the resolution of any and all issues. I stand by my statement that the security of customer assets is of the utmost importance. Therefore, I will address the following issues with as much information and transparency as I’m able to give on an ongoing situation without affecting legal proceedings.
Zipmex is gradually releasing Z Wallet tokens and crediting them into Trade Wallet, starting with these five tokens: Solana (SOL), Ripple (XRP), Cardano (ADA), Bitcoin (BTC) and Ethereum (ETH). We’ve also established a new dedicated Customer Service Hotline. This is the visible progress we’ve made, but the majority of the work we have done thus far will manifest and become visible in the next few weeks.”
The following questions have been raised. Here are our responses.
Point 1: Origin of the problem and details of the resulting situation
For our ZipUp+ product, Zipmex deposits funds into the cryptocurrency lending platforms including Celsius Network (“Celsius”). When markets started to turn, Zipmex started to withdraw its funds from deposit partners. In the case of Celsius, Zipmex was informed on 13 June 2022, that due to unforeseen circumstances, withdrawals were paused. Celsius subsequently declared bankruptcy on 14 July 2022. At this date, Zipmex wrote off this deposit and absorbed it through our own balance sheet.
In parallel, we were made aware that another of our deployment partners (Babel) was experiencing liquidity issues. However, there was no reason for alarm as there was open and regular dialogue and both parties were pressing ahead with a resolution. We were confident that Babel would be able to find a resolution in the short term and Zipmex was still able to operate as usual.
On 20 July 2022, following a meeting between representatives of Zipmex and Babel’s representatives, Zipmex began to have serious reservations about Babel’s ability to resolve Zipmex’s liquidity issue in the short term.
In the meantime, in order to prevent short-term market volatility due to what were, at the time, inaccurate and emerging reports on Zipmex’s exposure to Babel Finance, Zipmex took the decision to temporarily halt transfers between the Z Wallet and the Trade Wallet. This coincided with a routine and planned maintenance of the Zipmex app and its servers. Zipmex proceeded to allow a tiered resumption of withdrawals on its Trade Wallet in small batches on 22 July 2022, following active steps taken to stem the flow of misinformation and correct the inaccuracies in the public domain; and also in line with the automatic moratorium protections extended to it under Singapore law by filing for the moratoriums on the same day.
As to why Zipmex had deposited funds with the two companies (Babel Finance and Celsius), as with all our partners, extensive due diligence is performed which covers business, legal and compliance, stability, and risk, amongst other variables. Both these parties were backed by extremely reputable investors.
- Celsius Network
Celsius Network raised over US$ 750 million in funding by the end of their Series B round at the end of 2021. They started the round with an investment of US$ 400 million. In total, Celsius Network raised funding of US$ 864 million valuing the company at US$ 3.5 billion.
- Babel Finance
Babel Finance raised over US$ 80 million in a Series B funding round in May 2022, bringing their total value to US$ 2 billion.
Point 2: The process of applying for a moratorium on debt in Singapore by the Zipmex group of companies
5 companies within Zipmex have filed for a Moratorium with the Singapore Court as advised by our legal counsel. This is also known as “an application for a moratorium on debt”. The effect of this Moratorium is to provide Zipmex with sufficient time to address problems and find a solution which will lead to the best customer outcomes.
Please note that while the moratorium filings in the Singapore Court represent an intention to conduct its restructuring in Singapore and seek moratorium relief out of Singapore, it does not legally affect the Company’s business in Thailand. For the Company, business continues as usual. Zipmex has announced details of the moratorium process on our website in the interest of providing its customers and creditors with real-time updates on the progress of the matter in Singapore, and to address misconceptions and potential misrepresentations about the process to the public.
In this process, our ‘creditors’ have the right to file an affidavit in the Singapore court by 5 August 2022. The Zipmex companies have been given the opportunity to respond to any such affidavits by 10 August 2022, and the Singaporean Court will deliberate on the Moratorium request on 15 August 2022. If you are a customer or creditor of Zipmex who wishes to attend the hearing, please inform our solicitors at [email protected] as soon as possible so they can inform the Court that you wish to attend the hearing.
The Company hereby states that there is no intention to conceal any facts and that everything is being done in accordance with court procedures. When there is progression, the Company will inform all customers, media and relevant parties through emails and announcements on the Zipmex website.
Our number 1 priority is our customers and throughout this whole process, our main objective is to fight for the best customer outcome.
Point 3: Troubleshooting: The road to solutions
Zipmex is exploring multiple avenues. Firstly, Zipmex is working towards the return of assets from Babel Finance. Secondly, we are in advanced fundraising conversations which will allow us to re-enable Z Wallet transfers.
As it stands, Zipmex has had discussions with multiple reputable, and large-scale investors and has signed a Memorandum Of Understanding (MOU) with two investors. As we know this is time-critical, Zipmex and its investors are expediting due diligence as much as possible to bring forward a resolution for customers.
At the same time, a current Zipmex shareholder who still firmly believes in the Zipmex business made an additional investment into our native Zipmex Token (ZMT), reinforcing investor confidence in the potential of ZMT and the Zipmex ecosystem.
In addition, the development of ZMT is moving ahead in accordance with our Roadmap, as we have informed all our customers and the media.
Point 4: Moving forward on Z Wallets
In just under two weeks, Zipmex has worked hard to find solutions and expedite resolutions where possible. Negotiations with investors, coordination and requests with government agencies, and providing service to customers to the best of our ability, Zipmex is doing everything we can to meet its customer promise.
A big question we’re constantly asked is in regards to Z Wallet withdrawals. Today, we are announcing some progress.
We promised to resolve the Z Wallet situation and resume services. That’s why, after having stabilized the situation, we’re releasing unaffected digital assets namely: ADA, SOL, and XRP into users’ Trade Wallets, starting tomorrow, 2 August 2022.
On the following dates, the relevant tokens will be released from Z Wallet in the manner explained above:
Tuesday 2 August 2022 – SOL (100% amount of users’ balance in Z Wallet)
Thursday 4 August 2022 – XRP (100% amount of users’ balance in Z Wallet)
Tuesday 9 August 2022 – ADA (100% amount of users’ balance in Z Wallet)
Tokens in Z Wallet will be debited and the corresponding amount will be credited back into your Trade Wallet. No user action is required. Once the tokens in the Trade Wallet are available, you may withdraw as per usual.
We know it’s a small step, but it’s a step in the right direction. We realize many users will still have some BTC, ETH, and stable coins remaining in Z Wallet. We are working to ensure that we are in full compliance as we start to release some of these tokens into your Trade Wallet starting in the middle of August.
Customers can follow the official opening schedule of each coin via our website and all other official Zipmex channels as we attempt to progress towards a full resolution.
However, the entire Zipmex Team knows and understands that this incident has created significant inconvenience, doubt and uncertainty. We are committed to resuming all services on the Zipmex platform ASAP and, to rebuild confidence and alleviate customer concerns.
Thank you for your continued patience and support.