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Zipmex Investigated by Thai SEC After $100M Acquisition

Beleaguered crypto exchange Zipmex is being probed by the SEC in Thailand as it may have been operating as a “digital asset fund manager without permission.” The investigation focuses on Zipmex’s ZipUP and ZipUP+ programs, according to Bloomberg.

Zipmex May Have Been Acting as Digital Asset Fund Manager, Thai SEC Says

Thailand’s Securities and Exchange Commission (SEC) is investigating whether the crypto exchange Zipmex violated local regulations in some of its business activities, Bloomberg reported Wednesday. The probe comes less than a month after the SEC wrote a letter to Zipmex Thailand’s CEO Alakarp Yimwilai, notifying him that the crypto exchange could be breaching some of the digital asset business rules.

According to the letter, the troubled crypto exchange may have operated as a “digital asset fund manager without permission.” The SEC set a January 12 deadline for Zipmex to clarify the matter.

More specifically, the probe concerns Zipmex’s ZipUP and ZipUP+ programs, which the crypto exchange has been offering since October 2020. The programs allow users to earn returns on their token holdings and “get up to 10% [in] annual rewards” on their crypto, according to the official website.

Probed Soon After Being Acquired

The investigation comes after Zipmex Asia’s $100 million sale to V Ventures, a subsidiary of the investment firm Thoresen Thai Agencies. The acquisition, set to be financed in digital coins and cash, represents the first crypto rescue deal in Asia following a string of bankruptcies in the sector over the past year.

The Bangkok-based crypto bourse was forced to restructure after taking heavy blows in the persisting crypto winter. The Asian virtual asset space has witnessed several collapses, including Terraform Labs and crypto hedge fund Three Arrows Capital (3AC).

According to Bloomberg, V Ventures offers $30 million in cash, while the remaining $70 million will be funded in cryptocurrencies. Under the terms of the deal, the venture capital (VC) fund will acquire around 90% of Zipmex, which will use the crypto funds to unblock the frozen wallets of its customers by April.

Zipmex halted withdrawals in July 2022, citing “volatile market conditions, and the resulting financial difficulties of our key business partners.” The halt came shortly after crypto lender Celsius Network stopped withdrawals before announcing bankruptcy that same month.

Founded in 2019, Zipmex operates in Singapore and Thailand, according to the exchange’s website. The company obtained the digital asset trading license from Thailand’s SEC and held an exempted payment service provider license in Singapore.

This article originally appeared on The Tokenist

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