Zipmex Exchange, With Investors Like Coinbase, Suspends Withdrawals
✍️ 27 March, 2023 - 4:29 👤 Editor: Jakub Motyka
- The Zipmex exchange has decided to suspend its withdrawals.
- Coinbase claimed not to be exposed to companies that have fallen due to the crypto winter, however However, it has investments in Zipmex.
- Coinbase needs to regain the trust of its users to survive the downtrend.
As a result of the winter of cryptocurrencies, many companies, such as Zipmex, have seen the need to suspend their withdrawals, despite the risk posed to investors like Coinbase. As in traditional banking, companies that they do not have the total liquidity of their virtual activity resort to this type of measure, until they manage to control the liquidity crisis. However, this has generated a lot of uncertainty within the market, because Coinbase has investments within the exchange.
Zipmex is a cryptocurrency exchange based in Singapore that offers its services globally. It has Spot trading and interest functions, leveraging users' cryptocurrencies, in a similar way as Celsius did before going bankrupt. It provided an annual return of up to 10% for stablecoins, and 6% for cryptocurrencies such as BTC and ETH.
What Is The Reason For The Discomfort Of Coinbase Users Regarding The Zipmex Measure?
According to a statement from Zipmex, poor planning and market conditions forced them to stop withdrawals, given the possibility that a large number of users decided to claim their money simultaneously. In other words, the exchange does not have the necessary support to pay all of its clients, including Coinbase and other investors.
Coinbase had already responded in previous days about the rumors of its apparent insolvency. They ensured that their funds were fully backed, and that they had rigorous risk management in place. However, their exposure to Zipmex and the accompanying rising tide of FUD could undermine user confidence in the exchange.
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