Singapore-based cryptocurrency exchange Zipmex has disclosed that it is lending funds to struggling crypto lenders Celsius Network and Babel Finance, according to a statement released Thursday.
Zipmex said its current Babel loan exposure is $48 million, with another $5 million at Celsius.
Recall mid-June when Babel and Celsius froze client withdrawals due to liquidity issues fueled by turbulent market conditions. About a month later, Celsius filed for Chapter 11 bankruptcy.
Since Zipmex’s exposure to Celsius is relatively low, the exchange is waiving payment as it intends to write off the loan from its balance sheet, the statement said.
Zipmex added that it is currently engaging with Celsius and Babel to resolve the issues.
The move comes shortly after Zipmex halted withdrawals due to market volatility beyond its control. Nonetheless, the company has now authorized withdrawals from its commercial portfolio and is “actively working to resume operations,” according to the statement.
“Since the black swan events surrounding the crypto space, Zipmex has recovered the majority of our funds and assets that were historically on deposit with our deployment partners and has been actively working to resolve the situation for the remaining assets in circulation. There has been no material negative impact to our operations,” explained Zipmex.
Babel Finance did not immediately respond to a request for comment from Seeking Alpha.
Earlier, Citi said the crypto-contagion triggered by the terra collapse may be coming to an end.