The Securities and Exchange Commission (SEC) of Thailand has expressed its concerns about the losses that users of the Zipmex exchange have had to deal with.
The exchange took everyone by surprise when it announced last week that it was halting withdrawals and a number of other services because of the difficult market conditions.
SEC looking into the matter
On Monday, the Thailand SEC announced that it was gathering data about the affected users of the Zipmex crypto exchange and was collaborating with law enforcement authorities for this purpose.
The regulatory authority wants to assess the impact on the users after the exchange had decided to halt its withdrawals.
Moreover, the SEC also urged users of the exchange who have been affected to provide details via an online platform that can be found on their website.
According to the Thai SEC, they had put up a form on their website for the convenience of the users and they could just fill it out with the facts and details that are required.
Zipmex reversed its decision
Last week, Zipmex announced that it was imposing a freeze on its withdrawals and had cited extreme market conditions and the subsequent financial problems of its business partners for doing so.
Once withdrawals had been suspended, there had been speculations that the company could be in trouble because of possible exposure to Three Arrows Capital, the crypto hedge fund, and Celsius Network, the crypto lender, which filed for bankruptcy.
Within 24 hours of making the announcement, Zipmex announced that it was reinstating withdrawals once more, but it had already caught the attention of the Thai SEC by then.
A letter was sent to the crypto exchange by the SEC in which it asked Zipmex to provide details about why it had halted withdrawals on its platform.
Thai SEC questions Zipmex
The SEC also demanded answers to a number of other questions from Zipmex. It asked the crypto exchange to provide details about the total valuation of the crypto assets it has in its custody.
In addition, the Thai SEC also questioned Zipmex about its exposure to troubled crypto lending platforms, such as Celsius Network and Babel Finance.
Once Zipmex had reinstated withdrawals on its platform, the exchange admitted that it had indeed been exposed to these two lenders.
It said that Celsius Network owed the platform $5 million, while Babel Finance owed $48 million. Since the former has declared bankruptcy, Zipmex intends to write the loan off as a bad debt, as the amount is also small.
As for the loan to Babel Finance, Zipmex stated that it was discussing the matter with the crypto lender to determine what can be done.
There had also been reports that Zipmex had been talking to third parties about some support that would help the exchange get through tough times.
The exchange had been on the brink of securing $40 million via a Series B funding round before the crypto market was hit with a downturn.