Crypto Exchange Zipmex Freezes Customer Withdrawals

July 20, 2022 11:52 am Comments

During this crypto bear market, it seems that Celsius Network is not the only company that is preventing withdrawals for customers.

Recently, Zipmex announced in tweet that the exchange would also be pausing all withdrawals from the platform sending more panic in the market.

The firm states that it decided to halt withdrawals for reasons such as market volatility and other factors which seems very similar to the reasons that Celsius provided before it became bankrupt.

Although such news may cause the market to be in a downturn for a little longer, many do believe that this is healthy for the market in the long term.

After all, all of the highly leveraged crypto businesses need to be removed before the industry can truly grow and thrive.

CryptoBriefing shares the details:

The Asian firm announced Wednesday that it had halted customer withdrawals due to market volatility and other factors. A tweet from the company’s official account read:

“Due to a combination of circumstances beyond our control including volatile market conditions, and the resulting financial difficulties of our key business partners, to maintain the integrity of our platform, we would be pausing withdrawals until further notice.”

Zipmex styles itself as “Asia’s leading digital assets exchange” and offers customers access to assets like Bitcoin, Ethereum, and its own Zipmex token. According to the Zipmex website, customers can enjoy up to 12% in rewards per year by depositing their funds on the platform.

For example, the exchange claims to offer 10% annualized returns on USDC and 6% on Bitcoin and Ethereum, though it doesn’t clarify how it generates the yield.

As noted, firms and blockchain projects that promise unusually high yields tend to have risks that are associated with them.

True blockchain projects that provide real utility and low risk often have little to no yields such as XRP and Stellar.

As a result, it is recommended that investors do an adequate amount of research before allocating capital to a platform or token that promises unusually high yields.

Due to this recent event, Zipmex joins a long line of other businesses that have suffered in the bear market which includes Celsius, Voyager Digital, CoinFLEX, Vauld, and Babel Finance.

CryptoBriefing concludes:

As a result, Celsius, Voyager Digital, CoinFLEX, Vauld, and Babel Finance have all pulled similar moves to Zipmex to deal with their own liquidity issues, halting withdrawals as they struggle to gather the funds to make their customers whole.

Last week, Celsius filed for Chapter 11 bankruptcy in New York. Like Zipmex, the firm promised customers returns that far surpassed traditional banking services.

The decision to freeze customer withdrawals is significant as it effectively blocks customers from accessing their money.

As Zipmex has not given any indication of when it plans to re-open withdrawals save for a note that they are paused “until further notice,” today’s update is bad news for the exchange’s customers.

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