Zipmex, a cryptocurrency exchange based in Thailand has made an announcement for the customers. The troubled exchange has announced that it will be returning deposits back to the respective customers.
However, the exchange has certain conditions in order that must be met before the funds can be released.
The users will be able to withdraw their deposits if the arrangements made by the exchange executives are approved by the eligible creditors.
Announcement by Zipmex
On February 15, Zipmex officials made an official announcement pertaining to returning deposit funds to the users.
The exchange has announced that it will not be able to proceed with its plan until the scheme is approved by the creditors who are eligible.
The approval of the scheme would be subject to a vote from the creditors on February 21. The particular firm managing the scheme would be KordaMentha.
If the voting goes in favor of the scheme, then things will go fully in favor of the users. As per the executives, following the approval, the users will be receiving 100% of their funds.
The funds would be returned in the form of digital assets that will be sent back to the users into their Z Wallets.
Debt Relief Request
It was back in July 2022 when the Zipmex exchange had filed for debt relief. According to the sources, it was in Singapore when the exchange officials had filed for the relief.
The reason behind the company making the decision was Babel Finance, considered the counter-party to Zipmex.
The teams at Babel Finance abruptly halted the withdrawal activity for the users. The platform revealed that the reason why they decided to halt the withdrawals was due to the liquidity pressure they were facing.
Babel Finance felt the pressure as a result of the chain reaction of November’s crash of the Terra Network.
After the Terra Network faced the crash, one of the major crypto firms that ended up taking the hit was Celsius, a major crypto lending firm.
Unfortunately for Babel Finance, it had funds stored at the Celsius Network that ended up getting frozen as the latter firm filed for bankruptcy.
With Babel Finance going down, it was only a matter of time Zipmex, which was linked with the counter-party ended up feeling the pressure.
According to the sources, both platforms combined owe a total of $53 million to the users. Out of the total amount owed, $5 million are owed by Babel Finance while $48 million are owed by Zipmex.
When did Zipmex Pause Withdrawals?
As the Terra Network crashed, it triggered a contagion that has its remnants impacting the cryptocurrency market.
After the crash of the Terra Network, its contagion started to spread all over the cryptocurrency industry. It was in the month of July when the contagion made its way to the Zipmex exchange.
Therefore, the exchange announced in July that it had halted the withdrawals for the users. However, the exchange did not halt the withdrawals for long, as it resumed them a couple of days after making the announcement.
The resumption of the withdrawals were announced for the Trade Wallet, the trading fund service, and the fiat currencies.
Although the above-mentioned methods were permitted to carry out withdrawals, the situation was not the same for the Z Wallets.
To this day, the Zipmex exchange is in huge debt to the users of the Z Wallet. This is the particular category of wallet that the users used to store their bonuses and earnings from the Zipmex exchange.
The situation of the withdrawals resumption is still not clear but it is expected that the resumptions will be carried out on a gradual basis.
However, the company will not be able to go all out in terms of letting the users withdraw their funds entirely.