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Zipmex seeking US$50m after freezing crypto withdrawals

Zipmex, the Asia-focused crypto exchange that froze some withdrawals last week, has said it is seeking to raise at least US$50 million to repair its balance sheet.

The company confirmed the targeted fundraising amount in an emailed response to questions from Bloomberg. Zipmex is in discussions to sell all or part of itself after lending money to troubled crypto firms Babel Finance and Celsius Network Ltd, a person with knowledge of the matter said, asking not to be named discussing private deliberations.

Zipmex said in a tweet on Sunday that one of “various interested parties” it had held talks with had “offered terms” in a memorandum of understanding, without identifying the entity.

The fundraising target roughly represents Zipmex’s combined exposures to Babel and Celsius, which stand at US$48 million and US$5 million, respectively. Zipmex was derailed by the daisy chain of defaults that has rippled through the highly interconnected market for crypto lending and borrowing following a US$2 trillion rout in digital assets. Celsius filed for bankruptcy earlier in July and Babel has tapped restructuring advisers.

Zipmex operates in Thailand, Singapore, Indonesia, and Australia. It has a licence for digital asset trading from the Securities and Exchange Commission (SEC) of Thailand, according to its website. In Singapore, the exchange holds an exempted payment service provider permit, rather than a full licence under the central bank’s new regime for crypto-asset firms.

Among its products is ZipUp+, an account that pays yields as high as 10% on deposits of tokens like Bitcoin, Ether, and Litecoin. Withdrawals from that product are still frozen.

Thailand’s SEC is investigating whether there were any legal violations by Zipmex’s Bangkok-based unit as the company’s actions affected a large number of people, according to a statement from the watchdog on Monday.

“We have been engaged with the SEC and other government agencies to provide them with all required documents,” a Zipmex spokesperson said in an email, declining to comment further.

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