Ongoing ZIPMEX crisis

[Gaccha]

Although all the signs look like they will be bought (perhaps by MUFG or FTX) and that might save the frozen customer funds,  this will take several weeks at least,  and the Thai SEC appears to have set up an online form for all affected users (those using the ZipUp product) to ensure a direct communication line for customers:

 

"The SEC itself wants to make it more convenient for customers of Zipmex Thailand so it has provide an online filling form as well, it said." Nation Newspaper.

 

This badly worded paragraph seems to suggest the form is on the SEC site.

 

I am unable to find this form, but it could be very useful for future lawsuits. Anyone found the link?

 

 

[Gaccha]

Found the link. If you have any funds trapped on the Zipmex site then fill this form in and submit to the Thai SEC.

[Gaccha]

To update, ZIPMEX have signed two MOUs so far. If the due diligence is satisfactory these are likely to lead to binding contracts. 

 

They have declared a preference for investments over a buyout but given their destruction of their brand's reputation this is a rather surprising and bold move. 

 

If cryptos continue to rise in value, Babel Finance will be able to deleverage gradually and restart payments of the debt owed to Zipmex. Babel Finance suffered a collapse in 2020 which they recovered from by waiting it out until cryto regained in value. 

 

Zipmex have announced they have initiated legal action against Babel. This seems rather pointless unless they hold priority debt. 

[Gaccha]

They are slowly clarifying their plan. The clock is ticking.

 

They have roughly 25 days remaining until the creditor moratorium expires and they become vulnerable to vulture creditors. They have said they have signed 2 MOUs, at least one appears to be a serious foreign investor. And they have staked their (damaged) name on returning the major frozen funds within 2 weeks (i.e. the big coins such as bitcoin or stablecoins).

 

Zipmex are carefully attempting to ensure there is no 'bank run' by gradually returning funds. They've started with coins with few owners (such as SOL).

 

They are moving the money into the Trade Accounts over several weeks to minimise panic sells. They'll really needing to be canny about this as the ZipUp frozen accounts has caused colossal brand damage. 

 

The next 3 weeks are critical. 

[Gaccha]

To update,

 

Singapore has awarded Zipmex 3 months bankruptcy protection, which enables them to be protected from creditor litigation for that period. They have that time to either find a buyer or fresh cash. They currently have two MOUs signed. 

 

They have unfrozen all funds from the investment product portfolios of minor Altcoins and have also unfrozen small amounts of ETH and BTC (around 5,000 bahts worth each). Although trivial amounts, this does actually fully compensate 60% of investors. 

 

They have just announced that all ZMT will be unfrozen from the 25th August. 

 

As things stand, all stablecoin money remains frozen in the investment portfolios. And enormous sums of ETH and BTC remain frozen.

 

Presumably, until/unless they have new cash, they will not be able to unfreeze any further. The next 10 weeks will be crucial. 

[FritsSikkink]

Nobody will pay enough money to clear all debts

[Gaccha]

This afternoon, Zipmex secured an extension of creditor protection in the Supreme Court of Singapore until April 2023.

 

Interestingly, according to the press reports, the judge has required that any takeover must be agreed by 21st December. This is presumably the press reporter not grasping the intricacies of the judge's ruling. Presumably, the judge was referring to the current takeover offering only. 

 

V Ventures has laid an offer on the table to buy Zipmex, but Zipmex's ability to grasp defeat from the jaws of victory should not be underestimated. So although any rational person would have grabbed this offer, the rather notoriously stubborn marketing director refused to sign onto it placing the whole deal in peril. The judge has given her a chance to rethink her behaviour.

 

If there is to be a deal, it should happen in around 2 weeks. 

[Gaccha]

On 12/2/2022 at 5:55 PM, Gaccha said:

the judge has required that any takeover must be agreed by 21st December. This is presumably the press reporter not grasping the intricacies of the judge's ruling. Presumably, the judge was referring to the current takeover offering only. 

As I thought... the report has been corrected:

 

"CORRECTION (Dec. 2, 11:08 UTC): Corrects that Dec. 21 was set for hearing superpriority claims. An earlier version of this story said it was a deadline for a takeover agreement. Adds details of Bloomberg report on V Ventures deal."

 

This is still ambiguous. It might be a way to gain court recognition of the new investment as having priority over all other creditors. In the alternative, it might be a way for certain creditors such as the lawyers etc dealing in the bankruptcy protection gaining priority recognition. 

[Gaccha]

The deal agreed upon divides the customer creditors into two groups. People with less than 5,000 dollars of value will be presumed to agree to the deal. Those with more than 5,000 dollars must be persuaded to agree. There will be a roadshow in Thailand and Singapore to persuade them. 

 

The deal seems vulnerable to litigation for several reasons but the most obvious are:

 

The deal treats creditors differently depending on jurisdiction and, incredibly, expects regulators to go along with this. The judge was shocked that this matter had not been more thoughtfully dealt with. 

 

The value to be returned will be that of July 2022, which not only removes credited extra amounts of "interest", but ignores the value cost of losing access to the money for one year. 

[Gaccha]

As an update, although no news services have confirmed this, V Ventures, the venture capitalists who agreed to buy Zipmex for 100 million for a 90% share, have already provided the first tranche (I find it odd that the word "tranche" is used in this situation for lots of complex reasons that I won't go into).

 

 

 

Apparently, they'll make themselves a creditor to the company in 5 batches of credit before then becoming an owner in April. At any point, I believe they could still back out but it seems a surprisingly canny investment so that is unlikely. Several experts have pointed out, to my surprise, that the debt owed by the bankrupt Babel Finance (around 35 million) is likely to be retrieved by Zipmex. 

 

 

[blackcab]

A post with a link to the Bangkok Post has been removed.

 

16. The Bangkok Post, Khaosod, Pattaya Mail, Phuket News and the Thaiger do not allow quotes from their news articles or other material to appear on ASEAN NOW. Neither do they allow links to their publications. Posts from members containing quotes from or links to the Bangkok Post, Khaosod, Pattaya Mail, Phuket News and the Thaiger publications will be deleted from the forum. These restrictions are put in place by the above publications, not by ASEAN NOW. In rare cases, forum administrators or the news team may use these sources under special permission.

[Gaccha]

My understanding is Zipmex have now received the second "tranche" of debt. They have also unfrozen the "Gold Coin" crypto, a stablecoin intended to match the value of gold. 

[Gaccha]

Update time.

 

As announced a couple of weeks ago the creditors have approved the recovery plan for Zipmex to be purchased by V Ventures.

 

And Zipmex announced yesterday that they are putting in an application to the Singapore Supreme Court to approve and go ahead with the plan as of 30th of March. 

 

So in a piece of rather unlikely crypto news, it appears the creditors (aka those with cryptocurrencies locked within Zipmex) will get them all back, in the next two or three weeks.

[hkstar]

These are good updates Gaccha, you seem well informed. The company is certainly keeping infuriatingly tight-lipped about every aspect of this fiasco.

 

I'll clarify your summary further by adding that the court hearing on the 30th is to sanction the scheme of arrangement creditor agreement, which makes legally binding the repayment agreement with all creditors - they will be paid back in full but cannot sue or seek any other compensation for the loss of access to their funds. This court sanctioning of the agreement is the final condition for the purchase deal going ahead and while nothing can ever be certain it seems highly unlikely the court will reject it.

 

ZM also seeks a 3 week extension to the moratorium to file all necessary paperwork and administrative finalisation of the arrangement, after which the last remaining obstacle to the deal's completion will be met. Again, it seems highly unlikely the court will reject this.

 

If all goes well - and there are no obvious reasons why it wouldn't, especially this far in - it looks like creditors (like myself, and presumably yourself) should be made whole in around a month from now.

[Gaccha]

Another ypdate:

 

It seems the deal in the very last minute has collapsed.

 

V Ventures failed to pay its expected loan to Zipmex. What is odd is it seems they are not telling Zipmex why they haven't paid it.

 

There might still be a devilish twist in this tale. But as things stand, Zipmex will be forced into bankruptcy within weeks. 

[Gaccha]

Final extension for Zipmex was granted by court until 23rd April.

 

It is a complete mystery to all media and the SEC as to whether the deal is on or not. Zipmex and V Ventures have been silent.

[Lemsta69]

4 minutes ago, Gaccha said:

Final extension for Zipmex was granted by court until 23rd April.

 

It is a complete mystery to all media and the SEC as to whether the deal is on or not. Zipmex and V Ventures have been silent.

Thanks for the update. 

[Gaccha]

New info.

 

In response to the Singapore Court's demand for an update, Zipmex has just informed the court that V Ventures, the potential buyer ("Subscriber"), will now only provide 10 cent or 20 cents to the dollar for the creditors. They had previously promised 100%.

 

V Ventures is doing this in response to what it believes was the unilateral decision of Zipmex to not include Thailand Zipmex in the scheme of arrangements at Singapore Court, and secondly the failure of the management of Zipmex to sign off on the Management Arrangement scheme.

 

Zipmex are currently negotiating with them, and also with a couple of other potential buyers because of the desperate nature of the situation. They have also requested that the court again extend the moratorium.

 

This ploy by the buyer was predictable, and should not be rewarded. Even if the creditors get less, an agreement with anybody but V ventures would now be best.

[Gaccha]

Since my last update broke the news before any news site on the planet, I should rename my updates, 'Breaking News!'.

 

Zipmex has submitted documents to the Singapore Court for a 2 months extension of the creditor moratorium.

 

According to the affidavits, they have found three different parties who might have various levels of interest. Party in which they might have the most hope is a Thai company listed on the stock exchange.

 

I suspect the court will give them an extension but not of 2 months. Probably a month.

[balo]

Hi , I have a friend living in Bangkok who wants to apply for a crypto visa card with Zipmex, I was planning to help him with opening a ZIpmex account.   I am on Binance myself but it's not available in Thailand.  

I read this in Bangkok Post last year : Zipmex Thailand is preparing to launch a crypto Visa debit card service

 

*Link to the Bangkok Post had been removed*

 

16. The Bangkok Post, Khaosod, Pattaya Mail and the Phuket News do not allow quotes from their news articles or other material to appear on ASEAN NOW. Neither do they allow links to their publications. Posts from members containing quotes from or links to the Bangkok Post, Khaosod, Pattaya Mail and the Phuket News publications will be deleted from the forum. These restrictions are put in place by the above publications, not by ASEAN NOW. In rare cases, forum administrators or the news team may use these sources under special permission.

[Gaccha]

New update:

 

I can only find this in the Thai press currently, but the director has resigned and he has explained his resignation is because the five potential investors did not intend to proceed. 

 

This means Zipmex will not be able to abide by the court rescue scheme. Presumably the feeding frenzy will now begin for all the creditors to grab what they can of the carcass of Zipmex. 

 

RIP Zipmex 

[Gaccha]

Breaking News

 

As with my last reply the news sites have not yet said anything about this.

 

Zipmex has applied again for an extension to prevent any action by creditors. Don't get excited.

 

The plan in place to wind up the Zipmex Asia operation continues. They are in the late stages of a sale of Zipmex Thailand, which looks like it will be sold for peanuts. This is in line with my expectations as the brand has no value now.

 

The creditors of the lockup facility have their money in Zipmex Asia and so their focus will be its winding up. There are a huge number of ifs and buts in the affidavit of the CEO. But it looks like the creditors will gain around 5% return of the debt in the company.

 

For most of them this will be received within three or four months of the winding up. For those with credit of greater than $2,000 (a very small percentage of the 68,000 creditors), they will have to wait an estimated 3 or 4 years.

 

The only imaginable way that the situation dramatically improves is if Babel Finance actually are able to start paying back their debts. This is practically inconceivable.

 

(I've written this by skimming several affidavits submitted to the Singapore court. And then I have written this by memory. So do not rely on it)