Crypto Exchange CEO Refuses To Step Down After $73 Million Loss

#OhNoCrypto

Crypto exchange Zipmex founder Marcus Lim has stated that he will continue to oversee the troubled firm unless its new shareholders ask him to step down.

In fact, shareholders and potential investors are urging that Lim resign, blaming his leadership decisions that led to a severe liquidity shortage, while Zipmex has been handed a three-month reprieve to turn things around.

Last week, Singapore’s supreme magistrate granted Zipmex three months of creditor protection, allowing the Australian-founded exchange extra time to raise between $50 million and $80 million in fresh capital.

The creditor protection will prevent Zimpex from being sued until December 2 of this year. The company initially requested a five-month reorganization reprieve.

Crypto Exchange Boss Has Other Things In Mind

During a recent interview with The Australian Financial Review, Lim claimed that he will remain in his position until all investors receive their money back.

In order to achieve this objective, the CEO of Zipmex, who owns nearly a quarter of the company, must seek to recruit new majority owners. He indicated that they are developing a strategy to re-pay the roughly 400,000 affected clients in full.

Image: The Crypto Times

Lim stated that he and Co-Founder Akalarp Yimilai will leave upon reaching this objective, should investors still desire their departure:

“Should this occur, my co-founder Akalarp [Yimwilai] and I have made it plain that we will work fully with them and their wishes if they seek a management change.”

A key shareholder of the exchange issued Lim a letter requesting his resignation, citing a “loss of confidence between partners” and the consequences from the Babel disclosure, according to a Bloomberg story citing a person with knowledge of the situation.

Zipmex Troubles & The Crypto Market Turmoil’s Domino Effect

Zipmex, which employs over 250 people in Indonesia, Singapore, Thailand, and Australia, is just one crypto-based company encountering spiraling liquidity difficulties as a result of highly leveraged trading tactics that were rapidly unraveled following a dramatic market decline. The defaults immediately triggered a domino effect.

After filing for creditor protection last week, neighboring Singaporean crypto lender Hodlnaut has announced massive employment cuts pending “police proceedings” during the previous several days.

Mid-July 2020 marked the first time that Zipmex ceased withdrawals, with market conditions at the time prompting the action. It partially reinstated withdrawals, but its Z Wallet, which permits incentive-based deposits, remained unavailable.

The exchange, which has a digital asset trading license from the Thai Securities and Exchange Commission and a presence in Australia and Indonesia, disclosed at the end of the month that it was contemplating a potential acquisition proposal and was in discussions with interested parties.

Crypto total market cap at $984 billion on the daily chart | Source: TradingView.com Featured image from Forbes, Chart from TradingView.com

OhNoCryptocurrency via https://www.ohnocrypto.com/ @Jet Encila, @Khareem Sudlow