Struggling Zipmex exchange in negotiations over a buyout offer
An unamed party is looking at buying Zipmex, which implemented a pause on withdrawals less than a week ago.
Singapore-based crypto exchange Zipmex said it had obtained a memorandum of understanding from an unnamed party interested in buying the company.
📢 Important Announcement 📢
Our conversations with various interested parties have progressed significantly. One of those parties has offered terms in an MOU which includes confidentiality obligations so as to be able to commence Due Diligence. #zipmex
— ZIPMEX (@zipmex) July 24, 2022
The firm did not disclose further details.
Under such circumstances, the next step is typically for the interested party to analyze the offering party’s financial records to assess the business as a going concern.
Zipmex joins list of illiquid platforms
On July 20, Zipmex announced a pause on customer withdrawals due to factors beyond its control, including “volatile market conditions” and “financial difficulties” experienced by key business partners.
A statement from the firm revealed financial exposure to Babel and Celsius of $48 million and $5 million, respectively. The firm commented that they are in active discussions with Babel to resolve the situation. At the same time, Zipmex said the balance owed by Celsius would likely be written off. However, both parties are still engaged in moving the issue forward.
“Our first priority is to our users and we are doing everything in our power to restore all functionality on the platform while being as transparent as possible.”
The crypto contagion has led to similar actions at Voyager, Celsius, BlockFi, and CoinFLEX. Meanwhile, during the turmoil, derivative exchange FTX has positioned itself as a backstop for struggling crypto firms.
Commenting on the ongoing negotiations between FTX and Voyager, @FatManTerra chimed in, calling out FTX as acting “extremely predatory,” which may result in further pain for Voyager users.
You have all heard the terms "hero," "bailout," "rescue," and "help" in reference to FTX saving distressed companies. Voyager, one of the aforementioned companies, disagrees – they think that SBF's deal is extremely predatory and will actually hurt customers even more. https://t.co/l726t4U4RR pic.twitter.com/NeARz3lRiP
— FatMan (@FatManTerra) July 24, 2022
ZMT token falters amid uncertainty
Meanwhile, since announcing a pause on withdrawals on July 20, Zipmex’s native token suffered a sharp decline, dropping from $0.567292 to $0.289905 on July 23 — a 44% decrease.
An ensuing rally peaked at $0.361946 on Sunday afternoon (GMT) before a continuation of selling sees further price declines going into Monday.
The ZMT token is currently down 95% from its all-time high of $5.88, achieved on April 15, 2021.