- Reportedly, Zipmex lent $100 million in funds to battered Babel Finance.
- Zipmex is looking to raise Series b+ funding.
On 17th June, Hong Kong-based Babel Finance halted withdrawals as the crypto lender struggled to pay back its clients following the recent crash in the crypto economy. Babel Finance’s downfall reportedly affected the financial stability of several crypto exchanges.
On Wednesday, Singapore-based crypto exchange, Zipmex suspended withdrawals from its platforms, citing a “combination of circumstances” that were beyond its control. According to the company, the volatile market conditions and the “resulting financial difficulties of their key business partners” made them take this “drastic action.”
Zipmex’s current financial state can be linked back to the battered crypto lender Babel Finance, according to people familiar with the matter. According to sources, the Singapore arm of Zipmex faces a loss of about $100 million of funds lent to the now embattled Babel Finance through a product called “ZipUp.” As per the official website, ZipUp is an interest-bearing account where you earn the highest interest on your digital assets.
The source states that Zipmex “has a Thai exchange license and an exempt status in Singapore.” “Under the Thai License, they are strictly not allowed to touch customer funds. However, Zipmex has a product on the exchange called zip-up that effectively lets users move funds under the Singapore entity to earn yield.”
The source further added that the “funds were given to Babel to generate the yield. About $100m was lent to Babel, which is now at risk of default.” In August 2021, Zipmex’s user base reached 200,000, while it has reported over $1 billion in gross transaction volume since its launch in late 2019.
Zipmex CEO Marcus Lim, when enquired about its link with Babel, stated that the group “doesn’t comment on rumors.”
The Zipmex exchange launched in 2019 has operations in Thailand, Indonesia, Singapore, and Australia. In 2021, the firm raised $41 million including an investment from the Bank of Ayudhya, one of Thailand’s largest banks. In mid-2021, the exchange’s user base reached 200,000 while it has reported over $1 billion in gross transaction volume since its launch in 2019.
Last year, the U.S.-based leading crypto exchange Coinbase had been in talks to acquire Zipmex but later resorted to only making a strategic investment in the firm. Reportedly, Zipmex is looking to raise Series B+ funding that could raise its value to $400 million. Earlier, the company raised $52 million with backers such as B Capital, V Ventures, MindWorks Capital, and Master Ad.