Thailand’s Securities and Exchange Commission (SEC) has ordered Zipmex to temporarily suspend its operations as a digital asset trading and brokerage platform. The directive comes as the market regulator required the beleaguered cryptocurrency exchange to improve its financial position as well as make some changes to its management structure.
Zipmex faces a 15-day countdown to achieve compliance.
The SEC announced in a statement on February 2 that it was temporarily barring Zipmex’s operations for failure to comply with regulatory standards. The Securities Supervisory Service previously announced on January 12 that it had issued an order to the exchange requiring management structure and personnel reorganization to maintain net liquid capital, improve efficiency, and protect customer interests.
However, at the committee’s February 1 meeting, the SEC concluded that Zipmex was not yet in compliance with established regulatory guidelines. Therefore, they are ordering trading platforms to cease operations from February 2nd. Additionally, within 15 days after the ban becomes active, Zipmex must comply with the SEC’s orders regarding its financial operations and operational deficiencies.
Cryptocurrency trading companies must also design a working system that can protect investors’ deposited assets from all forms of exploitation. After this set period, Zipmex is expected to file a report on this implementation with the SEC, upon approval of which the exchange will resume operations.
Will Zipmex finally close?
Following the release of the SEC’s latest guidance, Zipmex has yet to issue an official statement or response. It is worth noting that the trading platform has been under regulatory scrutiny for over a year after it applied for 2022 moratorium relief in relation to $97 million in debt it owes customers.
In November 2023, Zipmex proposed paying creditors 3.35 cents on the dollar, as in its debt repayment and restructuring plan. The same month, the exchange deactivated trading and deposit services on its platform in November following an SEC order regarding the company’s net float.
Notably, in January the exchange advised customers to withdraw their assets from the platform, suggesting that cryptocurrency exchanges could cease operations in the coming months, a sentiment further reinforced by the SEC’s latest guidance.
The market regulator has also directed exchanges to maintain withdrawal functionality at all times even during the operational ban. However, withdrawals from Zipmex can currently only be performed manually. This means that customers will need to contact customer care to initiate the withdrawal process.
Total crypto market cap valued at $1.61 trillion on the daily chart | Source: TOTAL chart on Tradingview.comFeatured image of NW Flags, chart from Tradingview