The troubled cryptocurrency exchange Zipmex is planning to repay its creditors 3.35 cents per dollar for their original claims as part of its efforts to restructure.
Sources familiar with the situation told Bloomberg that this amount could potentially increase to as high as 29.35 cents per dollar, depending on the recoveries made from the exchange’s revised restructuring plan as it works to settle a debt exceeding $97 million.
Zipmex’s Proposed Repayment
As expected, major creditors of Zipmex are opposing the exchange’s proposal and have requested an independent evaluation of its assets and liabilities. They plan to vote on the current restructuring plan by early December.
Zipmex’s co-founder and CEO Marcus Lim stated that the figure reported by the media was incorrect but declined to reveal the specifics of the proposed plan.
This latest development follows Zipmex’s temporary suspension of all cryptocurrency trading and deposits in Thailand to comply with regulatory requirements from the Securities and Exchange Commission (SEC). Customers have been advised to contact customer support for withdrawals if their assets remain on the platform after January 31, 2024.
Zipmex faced difficulties in July 2022 and has been seeking a resolution. The exchange halted withdrawals after being impacted by the fallout from the Terra ecosystem’s collapse. Its situation was exacerbated by a $53 million exposure to the failures of crypto lenders Babel Finance and Celsius Network.
The distressed exchange has repeatedly requested the court to extend the period of its creditor protection to allow for the development of a suitable restructuring plan.
Zipmex’s Agreement with V Ventures
In December 2022, Thailand-based venture capital firm V Ventures made a deal with Zipmex to acquire 90% of the company for $100 million in cash and crypto assets. The agreement included the gradual release of users’ frozen assets using cryptocurrencies by April 2023.
However, V Ventures failed to fulfill the fourth tranche of the payment, which was due on March 23. The payment delay was followed by a new proposal to pay Zipmex’s creditors approximately 10% to 20% of their claims, a significant departure from the original offer for full payment.
V Ventures stated that its revised offer was a consequence of Zipmex’s failure to meet the terms outlined in the initial proposal.
Image source: Luckymane @ Shutterstock
