The crypto exchange platform Zipmex has been allowed to resolve the problems related to liquidity as a Singapore-based court has provided the company protection of up to 3 months. The High Court of Singapore has decreed offering a moratorium to every among the entities operating under the umbrella of Zipmex until 2nd September this year. After this, the exchange will present its restructuring strategy, as reported by Bloomberg on Monday.
Zipmex Rescued, 3-Month Protection Given by a Court in Singapore
The move is directed toward the protection of Zipmex from likely legal cases to be filed on the behalf of the creditors during the period of moratorium following the placement of an immediate halt placed by the exchange on crypto withdrawals in July. Since then, the crypto exchange has restored withdrawals on a partial basis from the trade wallet of the firm however it is yet to restart the entirety of the withdrawals.
On 27th July, the crypto exchange filed for a moratorium to be protected from the creditors till 6 months after stopping withdrawals. The platform referred to the liquidity problems that, according to it, aroused because of being exposed to Babel Finance (a crypto lender) as it stopped withdrawals in recent June. The crypto exchange, which is based in Thailand, does not count as the initial crypto platform pursuing a moratorium in the jurisdiction of Singapore.
Protection of 3 months has additionally been ruled by Justice Aedit Abdullah to Vauld from its creditors. It is another native crypto company that blocked withdrawals in the initial days of July. Some reports point out that the shareholders as well as the likely investors of Zipmex have pushed Marcus Lim (the CEO of the firm) to resign from the management decisions as they consider them to be the reason behind the extreme cash crash.
Lenders Incapable of Meeting the Borrowers’ Needs in this Crypto Winter
Lending in cryptocurrency is a crypto service permitting the borrowers to utilize the crypto assets in the form of collateral for getting loans in the U.S. dollar as well as the rest of the fiat currencies or stablecoins such as Tether (USDT).
The respective operation lets the customers receive money without a need to trade their tokens and recompense the loan at another time. The industry of cryptocurrency has experienced huge liquidity-related problems during a lengthy bear market this year as it became impossible for the lenders to offer complete liquidity over the assets lent out simultaneously.