The Singapore-based cryptocurrency exchange Zipmex has suspended withdrawals of user funds until further notice.
In its announcement, the company explained that the decision was influenced by the current state of the cryptocurrency market and the financial constraints of its partner institutions.
Coinbase reportedly intended to acquire Zipmex but ultimately decided to invest in the company. The partnership, which was disclosed last month, was to contribute an undisclosed amount to a $40 million SeriesB+ fund round for the Thailand exchange. There are rumors that crypto lender Babel Finance participated in the funding round, but there have been no official confirmations.
According to a report from mid-June, Coinbase laid off 18 percent of its workforce, or 1,100 employees, as a result of market declines. Babel Finance, on the other hand, has been forced to halt the withdrawal of user funds, just as Zipmex did recently.
The most recent development adds Zipmex to the list of companies that have suspended withdrawals during the crypto winter.
A prime example is the cryptocurrency lender Celsius Network, which has suspended user withdrawals for over a month and has yet to release funds. Last week, the business filed for Chapter 11 bankruptcy protection.
However, Celsius Network’s insolvency may have been the result of poor risk management, as former employee Timothy Cradle acknowledged that the company had made some risky investments.
Other companies, including CoinFLEX, Vauld, Three Arrows Capital (3AC), and others, have either suspended user withdrawals or declared bankruptcy.
Despite the extreme volatility of the cryptocurrency market, some businesses have increased their acquisition and investment activity. This is exemplified by the cryptocurrency exchanges Binance and FTX. In June, Binance announced it would increase hiring, mergers, and acquisitions (M&A). FTX invested in the cryptocurrency lender BlockFi.