Zipmex Thailand, a prominent digital asset exchange, has suspended cryptocurrency trading until early next year. The decision comes in response to regulatory compliance concerns raised by Thailand’s Securities and Exchange Commission (SEC).
A Prudent Move for Compliance
In a Facebook post on a Saturday afternoon, Zipmex Thailand conveyed its commitment to conducting business operations strictly following the criteria established by Thailand’s SEC. The exchange declared, “Dear customers, Zipmex Limited would like to ensure the proper and compliant conduct of the company’s business operations by the criteria set by Thailand’s Securities and Exchange Commission (SEC).” As a result, the suspension of digital asset trading and deposits became effective from November 25, 2023, at 1 pm.
Despite this suspension, customers will still have the ability to withdraw Thai baht and digital assets from their Trade Wallets via the website and mobile application until January 31, 2024. However, for digital assets classified as ‘Trade Only,’ customers must contact Customer Support for withdrawal.
It is important to note that after January 31, 2024, when the company discontinues asset withdrawals through the website and mobile application, customers will be required to engage with Customer Support for further assistance. The withdrawal process for digital assets may take seven to 14 days, with customers having to provide supporting documents to confirm their identity and account ownership.
Challenges on Multiple Fronts
Zipmex, headquartered in Singapore and operating in Thailand, Australia, and Indonesia, currently faces penalties from Thailand’s SEC. These penalties stem from allegations surrounding Zipmex Thailand’s misuse of a digital asset custodian service and the directing of customers to the Singapore-based exchange, Zipmex Pte, which raised concerns about conflicts of interest.
The exchange has also grappled with financial difficulties, particularly in repaying creditors, following losses incurred due to exposure to crypto lenders Babel Finance and Genesis. A planned $100 million buyout of Zipmex earlier this year was thwarted when the prospective buyer, V Ventures, withdrew from the deal.
Zipmex’s tumultuous journey began last summer when it halted withdrawals due to the cryptocurrency market’s volatility. At that time, the platform encountered a liquidity crisis, primarily due to its exposure to the beleaguered crypto lender Babel Finance. The exchange communicated, “Due to a combination of circumstances beyond our control, including volatile market conditions and the financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.”
In August of the same year, Bloomberg reported Zipmex’s plans to engage with potential investors and Thailand’s financial regulator to devise a recovery strategy. By November, the platform was in advanced discussions with venture capital fund V Ventures for the sale of a majority stake.
Earlier this year, the Thai Securities and Exchange Commission investigated whether Zipmex had violated local regulations in offering certain digital asset products.
Competitive Landscape
The suspension of Zipmex Thailand’s trading activities coincides with the emergence of new players in Thailand’s cryptocurrency landscape. Gulf Binance, a joint venture between Gulf Innova and Binance, the world’s largest cryptocurrency exchange platform, recently obtained approval from the SEC to commence digital asset business operations in Thailand. It is set to begin trading cryptocurrencies early next year, intensifying competition among the country’s growing list of crypto exchanges, including Zipmex.
Amid regulatory scrutiny and financial challenges, Zipmex Thailand faces a critical juncture in its journey. As the cryptocurrency industry evolves, the exchange must navigate a complex landscape to regain its footing and restore customer trust. The upcoming months will be pivotal in determining the future of Zipmex Thailand in the dynamic world of digital assets.
