Zipmex Situation
| No. | Questions | Answer |
| 1 | What are the reasons that has caused the current circumstances for Zipmex? | As disclosed in the affidavits filed in the Singapore proceedings, the primary reason for the downturn is the exposure to Babel Finance and Celsius caused by their recent insolvencies and the crypto winter. |
| 2 | How has Zipmex’s relationship with Babel finance and Celsius impacted Zipmex’s financial position. | The total net exposure to Babel Finance and Celsius was, as at the date of filing of the moratorium applications, approximately USD 48m and USD 5m respectively. |
| 3 | Will I still be able to access my account? | Yes. You are still able to log into your account as usual, but some services may be suspended for now. As services may differ in markets, please refer to country specific announcements on service resumption. |
| 4 | Will I be able to make deposits into my Zipmex account? | Deposits are enabled only for Thailand users. All other markets, deposits are suspended until further notice. |
| 5 | Are customers allowed to withdraw cryptocurrency/digital assets from the Z-wallet or Trade Wallet to their private wallets? | Withdrawals from the trade wallet are enabled and functioning as usual. Transfers from the Z-wallet are only enabled for ZMT. Despite Z-wallet withdrawals being limited, your previous balances of SOL, ADA, XRP have been transferred to your trade wallet for access. A portion of BTC and ETH have also been transferred. Please see announcements for details. |
| 6 | What is being done for Zipmex to recover from this situation? | We have already carried out a number of cost cutting measures including a complete review of our general and administrative expenses, restructuring of the team and streamlining our business operations. Zipmex has also obtained moratorium relief in Singapore. Zipmex remains in discussions with two parties for potential capital injections which may enable remediation of the situation. |
| 7 | How does Zipmex plan to close the net liability gap? Will the position worsen? How long will it take? | We are currently raising funds to close the net liability gap. Fundraising is a very thorough process and we are in advanced stages of negotiations to finalise the commercial terms with four investors before an agreement is concluded. |
| 8 | If cryptocurrencies increase in value, will Zipmex’s financial position improve? | No, as the net liability is in the native cryptocurrencies, price improvements do not improve Zipmex’s position. |
| 9 | What’s SEC comment on Zipmex progress? | We are in constant communication with the SEC for compliance-related issues. |
| 10 | What is the estimated timeline that Zipmex will solve the current issue? | We anticipate that the business restructuring process to complete by the end of this year. However, there are other factors that may not be within Zipmex’s control but we are doing everything that we can to resolve the current situation as quickly as possible. |
| 11 | What are the affected cryptocurrencies and how much is the size of the exposure? | The affected cryptocurrencies are BTC, ETH, USDC and USDT. The total net exposure to Babel Finance and Celsius was, as at the date of filing of the moratorium applications, approximately USD 48m and USD 5m respectively. |
| 12 | What are the plans for non-affected assets under Zipmex? | Most of the unaffected digital assets have been transferred to customers’ Trade Wallet and Zipmex has recently re-enable transfers of ZMT from Z-Wallet to Trade Wallet. |
| 13 | Can Zipmex provide a timeline or rough estimation as to what is the current progress and when the fundraising deal will be done? | On the progress, we had been in discussion with 4 potential investors and currently decided to move forward and started finalizing the terms with 3 of them. The investors are further conducting in-depth 3rd party due diligence. If the terms are finalized, we will proceed into negotiating the final agreements. Unfortunately, we are unable to provide timelines as we are still progressing through the transaction. However, we will do our best to finallize everything soon. Apologies for the inconvenience caused. |
| 14 | Once the fundraising is done, will Zipmex be able to fully return all the assets in Z Wallet? | It is our management’s determination to recover 100% of the affected assets and re-enable ZWallet/ZipUp+ as soon as possible. We are doing our best to negotiate such terms with the incoming investor(s) since this also depends on the business direction going forward. |
| 15 | Once Babel & Celsius had liquidity problems, why did Zipmex not issue any announcement that Zipmex had financial arrangements with them? | Regarding Celsius, our exposure was relatively limited and the original plan was to absorb the loss on our balance sheet to protect our customers. With Babel Finance, we were actively working with their team on a potential resolution, and it was only when a resolution was looking like it would not be likely in the short term that we communicated to our users as soon as possible on 20th July. |
| 16 | How do customers cancel/revoke the ZipUp+ consent? | We have suspended ZipUp+ for the foreseeable future, and there is presently no need to cancel. We will be re-assessing the future of the ZipUp+ product. If the product was to resume, customers will always have the choice to cancel as needed. |
| 17 | How does Zipmex decide on how the restitution will be handed out to the customers, for example the past 0.08 ETH and 0.0045BTC deposits that Zipmex transferred to the customers’ Trade Wallets? | Restitution was decided based on a non-preferential treatment basis where all customers received the same amount. Such restitution was also done carefully to ensure that there is no disruption to business and the ability of Zipmex to continue operating as a going concern. We are aiming to fully restore access to Z Wallets as soon as possible. |
| 18 | Does Zipmex keep all the coins of its clients in their trade wallet untouched at all times? | Zipmex has terms and conditions for each jurisdiction that it operates in that is tailored to comply with applicable local laws. Under the relevant Zipmex terms and conditions in Thailand, all of the users’s funds in Trade Wallets need to be held in separate custody wallets. These wallets would also have to be managed by Zipmex Thailand and users should have access to these funds at all time. Under the relevant Zipmex terms and conditions in the other markets (Singapore, Indonesia and Australia), fiat currency in the trade wallet are held on a custody basis, while crypto assets held in trade wallets are not. In addition, there are separate terms and conditions for ZipUp+ where crypto assets are not held on a custody basis. |
| 19 | What’s the future roadmap to regain trust and boost customers confidence? What’s the company’s strategy going forward? | We believe that Zipmex’s core strength lies is in our ability to onboard and educate customers. Historically, we have played an important role in onboarding and educating customers about the web2 space in Southeast Asia. As we look to regain trust and boost customers confidence in the next chapter of Zipmex, we will further pioneer and be the thought-leader for everyone in Southeast Asia looking to learn and earn in the web3 space. In particular, we plan to launch Zixel+, a decentralized platform that enables users to stake ZMT to gain access, rewards and earnings in the global Web3 space. The Zixel+ web3 platform key development plan includes: – Launching of ZMT Staking Feature (DeFi version), which enables users to stake ZMT for different time period to earn ZMT yield – Launching of NFT Zone, which enables users to stake ZMT to obtain whitelist and exclusive airdrops with our partners – More cross-chain interoperability, supporting partner dApps to be connected to our Zixel+ web3 platform, enhancing the outreach of the Zixel+ ecosystem We will continue to build and expand our platform through new APIs, dApps and Web3 services, positioning the Zipmex ecosystem as a next generation platform and web3 ecosystem. |
| 20 | What is the current progress of the fundraising deal? | At the moment, Zipmex is in the negotiation phase with the potential investor(s). We are doing our best to proceed into finalizing agreements. We will update the progress for everyone once available |