In July 2022, the Zipmex announced maintenance on its platform, suspending recordings indefinitely. Soon the market realized that maintenance was just an excuse and the broker was insolvent.
Now this same cryptocurrency broker wants to pay $0.0335 for every dollar to its former customers. The information comes from Bloomberg, which cited anonymous sources with knowledge of the matter.
Although not a popular broker in Brazil, Zipmex’s bankruptcy is yet another reminder of the dangers of leaving cryptocurrencies with brokers. Other examples include the dispute between Mt.Gox, bankrupt in 2013, Cryptopia, bankrupt in 2019, and FTX, bankrupt in 2022.
A bankrupt cryptocurrency broker can propose a plan to his clients
Zipmex’s loss amounts to US$97.1 million (R$472 million). Like FTX, the broker used its customers’ money for other purposes. For example, it lost $48 million after a loan to Babel Finance and another $5 million from Celsius, also bankrupt.
According to information from Bloomberg, the brokerage is now about to offer a shameless deal to its former clients: pay about 3 cents for every dollar they had in their accounts.
Zipmex CEO Marcus Lim did not respond to Bloomberg when asked about the plan, saying he could not provide details because it is a confidential process.
As rumored, the Zipmex token (ZMT) fell 4.2% this Wednesday (29). Anyway, cryptocurrency was already dead since last year. The decline amounts to 99.88% from the historical peak of 2021.
Because we manage the bankruptcy proceedings of other companies, Zipmex customers may have to wait many years before seeing even a fraction of their savings deposited into the platform.
Cryptocurrency self-management is essential
One of the greatest features of Bitcoin and other decentralized cryptocurrencies is that their investors do not have to trust third parties. However, many investors continue to trust brokers as if they were banks.
Recent bankruptcy cases, regardless of the reasons, show that this is a bad choice. After all, even if by some miracle they manage to get their money back, these processes are extremely slow.
Finally, it is currently possible to find hardware wallets starting from R$400, a small amount compared to large investments. For small investors, there are free ‘hot’ wallets for every operating system.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
