|1||What is a moratorium and why does a company need one?||A moratorium is a restraint on creditors from taking actions against a debtor.|
For a company undertaking a restructuring, a moratorium provides breathing space from creditors whilst restructuring options and proposals are explored.
|2||What steps were taken by Zipmex to obtain a moratorium?||On 22 July 2022, our solicitors in Singapore, Morgan Lewis Stamford LLC, filed five applications under Section 64 of Singapore’s Insolvency, Restructuring and Dissolution Act 2018 on behalf of several of the Zipmex Group’s entities seeking global moratoriums to prohibit and restrain the commencement or continuation of proceedings against the companies.|
Subsequently, at a hearing in the Singapore court on 21 April 2023, the court extended the moratorium until 30 June 2023 for all five of the Zipmex Group entities.
|3||Which Zipmex group entities are protected by the moratorium?||The following companies are protected by the moratorium :|
|4||Are Zipmex’s foreign subsidiaries protected by the moratorium?||Yes, the Singapore court granted an in personam moratorium. This means that the moratorium applies to any act of any person in Singapore or within the jurisdiction of the Court, whether the act takes place in Singapore or elsewhere.|
|5||What does a moratorium mean for creditors (including creditors outside of Singapore)?||During the moratorium period, creditors are unable to make a claim against the companies or take legal actions for debts owing to them. This gives breathing space for the company to explore restructuring options as mentioned above, since the moratorium applies to those in Singapore or elsewhere, foreign based creditors will also be unable to make a claim or take legal actions.|
|6||Why has Zipmex filed an application in the Singapore court and not in the local jurisdictions?||This is a Group restructuring and each of the Zipmex companies has chosen to restructure their debts in Singapore. In addition, the Singapore Court has also found that the “centre of main interests” of each of the Zipmex companies is in Singapore and the foreign entities have sufficient connection to Singapore for them to conduct their restructuring here.|
|7||Is a person affected by ZipUp+ considered a creditor? If so, under what company? And how will it affect the application for a debt moratorium in Singapore?||Any customer with a Singapore or Thailand account who funds deposited in Z Wallets on the 20th July and after would be considered a creditor of Zipmex Pte Ltd. which is a company that is based in Singapore.|
All customers in Thailand would also be a creditor of Zipmex Company Limited, based in Thailand, if they had funds in their Trade Wallet.
All funded customers in Australia would be a creditor of Zipmex Australia Pty Ltd; and all funded customers in Indonesia would be a creditor of PT Zipmex Exchange Indonesia.
The moratorium has been granted in the courts of Singapore and includes all these entities. All creditors would be entitled to the funds available once the scheme of arrangement, which includes the entities mentioned, has been confirmed through the process highlighted earlier.
|8||There seems to be irregularities and inconsistencies between the names of the creditor-customer names provided in September and the ones provided in August.|
What is the reason behind this? Was anyone given preferential treatment to claim their crypto?
|There are no specific users that have been given preferential treatment over others. Any discrepencies may be due to changes in trading positions during the relevant period, consolidation of accounts or corrections in definitions and jurisdictions. It could also be that you are looking at extracts of the lists (which includes only unrelated creditors) rather than the full lists.|
|9||Why does Zipmex need to return the tranche payments since the investor is the one changing their mind?||The tranche payments are secured by charges granted over the shares of Zipmex Company Limited and PT Zipmex Exchange Indonesia owned by Zipmex Asia Pte Ltd. Without the benefit of the moratorium, which was extended to 30 June 2023, the investor may have forced Zipmex Asia Pte Ltd to sell these shares to recover the tranche payments.|
|10||Can you reveal the name of the investor?||Zipmex is currently unable to reveal the name of the investor. However, do note that the Singapore Court is considering unsealing the investor’s name in the most recent court proceedings. The investor’s legal counsel has been provided with the opportunity to raise any objections to the unsealing.|
|11||Does Zipmex have a case in getting the subscriber to enforce the SSA? Since its position is that the subscriber unilaterally terminated it?||Zipmex is currently exploring all legal avenues to enforce the SSA legally and will continue to provide updates on any progress.|
There may be additional costs involved for any application to the Court or in an arbitration to enforce performance of the SSA. We will keep creditors updated on any associated costs.
|12||Does Zipmex actually have evidence showing negotiations with investors? And why have investors breached the contract to pay only 10-20% from the agreed. At present, has the capital received from the investor has been refunded?||The “evidence” of negotiations with the current investor are set out in the 25th, 26th, and 27th affidavits of Marcus Lim and the 1st affidavit of Akalarp Yimwilai filed in HC/OA 383/2023, copies of which have been extended to all affected customers.|
The investor has claimed that the sum of USD 4.6 million in tranche payments is immediately repayable. Nothing has been “refunded” to the investor at this juncture.
|13||Because the investors break the agreement and not Zipmex, will the previous capital have to be returned to the investor? And given the breach of conditions by the investor, will Zipmex receive compensation in terms of damages, opportunity costs or deposits?||Zipmex’s position is that the investment agreement subsists. This means that all obligations still have to be performed by both Zipmex and the investor. Zipmex considers this to be the best way to achieve the best outcome for customers.|
Zipmex is currently exploring all legal avenues to enforce the SSA legally and will continue to provide updates on any progress.
|14||In the case of having to refund investors, how many months does Zipmex still have working capital in the company for business operations?||The situation is fluid. Zipmex is looking for alternative investors to extend working capital in the meantime.|
|15||Does Zipmex still wish to raise funds to return 100% of customers? Or does it have a plan to look for negotiated options at a reduced return?||Zipmex is continuing to focus all negotiations with potential and existing investors with the intention of finding the best possible arrangement that will provide the highest return to creditors.|
|16||From the withdrawal suspension date until now, digital asset prices have been highly volatile. How will Zipmex handle such problems for any new investment and repayment structures?||In consideration of any new investment structures and repayment plans for creditors, Zipmex is exploring multiple structures that would incorporate plans to manage volatility risk in the digital assets.|