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The $100 million Zipmex acquisition hit a stumbling block yesterday after V Ventures missed a $1.25 million tranche payment.
The impending acquisition of Thai crypto exchange Zipmex is in danger of falling through after the buyer missed a $1.25 million payment. According to a Bloomberg report, this payment was due yesterday and is necessary to fund working capital. In a letter, Zipmex revealed it would start liquidation proceedings for the technology unit Zipmex Technology Co. unless it receives the required payment. The embattled crypto exchange also plans to suspend that division’s payroll.
Zipmex Acquisition Payment Meant to Inject Liquidity into Company
The March 23rd payment was supposed to be the most recent remittance under a $100 million venture capital buyout. Zipmex had agreed to the buyout by Thoresen Thai Agencies Pcl subsidiary, V Ventures, late last year. At the time, the Asian exchange was weathering a liquidity crisis after suffering through the 2022 crypto bear market.
Before the payment default on the Zipmex acquisition, the exchange had received three tranches of funding. Nonetheless, Zipmex does not consider the payment problem an immediate hindrance. According to the troubled company, it still has the requisite cash to pay salaries. Furthermore, the exchange also intimated that it is working with advisers on the next steps. However, Zipmex did not specify whether the latest payment would come through, as the company is yet to receive a final indication.
Zipmex refrained from providing further insight into the payment problem. CEO Marcus Lim said the company was “bound by confidentiality.”
Zipmex Financial Woes & Subsequent Sale
Zipmex’s 2022 liquidity crisis was due to the Terra and algorithmic stablecoin UST crash last summer. At the time, the Asian crypto exchange had issued loans to crypto-focused platforms Celsius Network and Babel Finance, which went unpaid. The value of the failed loan repayment by Babel and Celsius was around $53 million.
Last July, Zipmex suspended withdrawals following its exposure to the two beleaguered crypto payment facilitators. In August, the crypto exchange commissioned a restructuring firm to aid with a recovery plan after filing for creditor protection.
In early November, reports stated that Zipmex was in advanced talks with V Ventures for a takeover worth $100 million. Furthermore, the reports claimed that V Ventures would pay $30 million in cash, and the rest in unspecified digital assets.
According to speculation in late 2022, Zipmex’s founder Chalermchai Mahagitsiri talked with two investors about a potential deal. However, the company neither confirmed nor denied the speculation, instead issuing a statement that read:
“Thank you for your interest in our efforts to make our customers whole. As talks reach a critical and sensitive stage with our potential investor, I am unable to comment as all parties are under NDA, and we do not want to jeopardize the deal. Will update you as soon as possible.”
The acquisition eventually sailed through in December, with Zipmex looking to channel the proceeds toward unlocking customer funds. In a court filing, the company revealed plans to settle customers by April 2023.