Troubled crypto firm Zipmex has received a little over three months moratorium from the Singapore High Court after it announced that it was going bankrupt a few weeks ago. This decision was taken at a hearing held today. According to the conclusion of the Singapore High Court, the moratorium will be over by December 2nd.
South Asian cryptocurrency exchange Zipmex bowed to the ongoing market crises as it bites harder and suspended withdrawal on its platform. Based on investigations, it was discovered that the crypto exchange had faced many fluctuation struggles including exposure to bankrupt partners Zipmex was exposed to Babel Finance, another crypto lender that paused withdrawal and redemption on its platform.
Zipmex lent over $100 million to Babel which it failed to pay owing to the financial crisis it was facing. Equally, Zipmex was exposed to crypto lending firm Celsius which filed for chapter 11 of the Southern District of New York Bankruptcy court.
After all of these, Zipmex applied for a moratorium against its creditors until it settles its liquidity crisis. Now that the moratorium is approved, affected creditors can no longer file a lawsuit against the firm or continue with a previously filed case for the defined time.
Singapore High Court Insists That Creditors Are Carried Along
Initially, the beleaguered exchange was bidding for a moratorium that would last for 6 months. According to an update on its website, Zipmex informed its users about the content of its moratorium request. Under the cover of the moratorium, the five entities of the exchange; Zipmex, Zipmex Asia, Zipmex Thailand, Zipmex Indonesia, and Zipmex Australia were included.
Nevertheless, the judge in charge of the moratorium, Justice Aedit Abdullah opined that Zipmex had not had enough engagement with its creditors especially those in Thailand.
No town hall meeting had been held with the creditors, which in Zipmex’s defense was not necessary as no objections had been raised against it. Therefore, only a three-month moratorium was approved although with a little extension window to December 2nd.
In like manner, crypto lender Vauld Group also received a three-month moratorium from the Singapore High Court at the beginning of the month. The court insisted that the Asian crypto lender come up with a creditors committee. Vauld intends to use this moratorium to set its restructuring process rolling. Over 2,280 of its creditors contributed to the approval of its moratorium.