Zipmex filed for bankruptcy protection, saying it wants to focus on resolving liquidity issues. It is one of many crypto companies facing financial stress due to the bearish market.
Zipmex, a Singapore-based cryptocurrency exchange, recently filed for bankruptcy in Singapore. It requested relief from the moratorium for five companies as it solved its liquidity problems.
Cryptocurrency exchange Zipmex joins other firms taking action against financial stress by filing for bankruptcy in Singapore.
The lawyers of Zipmex filed five applications under Section 64 of the Singapore Insolvency, Restructuring and Dissolution Act 2018. They said they expect to prevent users from experiencing service interruptions as they continue to operate their Trade Wallet and NFT platform.
According to the lawyers, that helps protect Zipmex from third-party actions, claims, and proceedings while it is active. In addition, they said this allows them to focus on resolving the liquidity situation without worrying about potential lawsuits or adverse actions. They explained that a moratorium does not involve liquidation, which keeps its status almost unchanged.
Zipmex Asia Pte Ltd, Zipmex Pte Ltd, Thailand-based Zipmex Company Limited, PT Zipmex Exchange Indonesia, and Zipmex Australia Pty Ltd are among the firms seeking relief.
Singapore law stipulates that those companies receive an automatic moratorium for 30 days or until the court decides what to do.
More Crypto Companies Experience Financial Stress
The bearish market has affected crypto companies, which have had to suspend withdrawals, face liquidity problems, or declare bankruptcy.
The primary victims of the crypto winter have been Celsius Network and Three Arrows Capital. It is also relevant to mention that Terraform Labs now faces serious legal trouble.
Cryptocurrency companies will adopt a more cautious approach as the bearish market has affected several firms associated with each other.
Although the cryptocurrency market has experienced similar problems before, it is painful at the current level of adoption and scale.
The Outlook of the Crypto Market amid the Current Bearish Trend
The bearish market has destroyed any hope of reaching new highs in the short term, but not all is gloomy regarding cryptocurrencies.
The general sentiment indicates perseverance, as institutions and retail investors remain optimistic about the medium to long-term future. There might be difficulties in the short term, mainly stemming from corrections and new regulations on cryptocurrencies.
According to Boston Consulting Group, there might be around one billion cryptocurrency users by 2030. The firm stated the crypto market resembles the Internet of the early 1990s, which means it can grow further.
Cryptocurrencies play an increasingly relevant role in the economy, evident in the efforts by many governments to regulate them. Amid the current bearish trend, many exchanges like Zipmex have filed for bankruptcy, as they cannot respond to their users.
Meanwhile, Bitcoin (BTC) is trading at around USD 23,978 and accumulated a 4.1% gain over the last 24 hours. Its daily trading volume is above USD 50.19 billion, while its market capitalization is about USD 458.15 billion, according to CoinGecko.
By Alexander Salazar
