Zipmex Group Insolvency: Extension of Moratoria and Substantial Connection to Singapore
The Singapore High Court granted an extension of moratoria to Zipmex Company Limited, Zipmex Pte Ltd, Zipmex Asia Pte Ltd, Zipmex Australia Pty Ltd, and Zipmex Exchange Indonesia, companies within the Zipmex Group, under Section 64 of the Insolvency, Restructuring and Dissolution Act 2018. The court, presided over by Aedit Abdullah J, addressed the jurisdiction over these foreign companies, focusing on their substantial connection to Singapore, particularly through the concept of the centre of main interests (COMI). The decision, made on 17 August 2022, allows the companies breathing space to formulate a rescue plan, with the extension lasting until 2 December 2022.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Applications allowed, with extensions granted until 2 December 2022.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court grants Zipmex Group an extension of moratoria, addressing jurisdiction over foreign companies and their connection to Singapore.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Zipmex Company Limited | Applicant | Corporation | Extension of Moratoria Granted | Won | Daniel Chia Hsiung Wen, Tang Yuan Jonathan, Wong Ru Ping Jeanette, Kuek Ying Ching Chrystle |
| Zipmex Pte Ltd | Applicant | Corporation | Extension of Moratoria Granted | Won | Daniel Chia Hsiung Wen, Tang Yuan Jonathan, Wong Ru Ping Jeanette, Kuek Ying Ching Chrystle |
| Zipmex Asia Pte Ltd | Applicant | Corporation | Extension of Moratoria Granted | Won | Daniel Chia Hsiung Wen, Tang Yuan Jonathan, Wong Ru Ping Jeanette, Kuek Ying Ching Chrystle |
| Zipmex Australia Pty Ltd | Applicant | Corporation | Extension of Moratoria Granted | Won | Daniel Chia Hsiung Wen, Tang Yuan Jonathan, Wong Ru Ping Jeanette, Kuek Ying Ching Chrystle |
| Zipmex Exchange Indonesia | Applicant | Corporation | Extension of Moratoria Granted | Won | Daniel Chia Hsiung Wen, Tang Yuan Jonathan, Wong Ru Ping Jeanette, Kuek Ying Ching Chrystle |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aedit Abdullah | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Daniel Chia Hsiung Wen | Morgan Lewis Stamford LLC |
| Tang Yuan Jonathan | Morgan Lewis Stamford LLC |
| Wong Ru Ping Jeanette | Morgan Lewis Stamford LLC |
| Kuek Ying Ching Chrystle | Morgan Lewis Stamford LLC |
4. Facts
- Zipmex Group operates a cryptocurrency exchange platform accessed through the Zipmex App.
- Zipmex Asia is the group holding company incorporated in Singapore.
- Registered customers gain access to the Zipmex App and a trade wallet.
- The trade wallet contains a fiat wallet for depositing national currencies.
- Cryptocurrencies are stored in a hosted wallet within the trade wallet.
- ZipUp+ service allows customers to deposit crypto assets into a Z wallet.
- Assets in the Z wallet are held by Zipmex Asia in an aggregated hot wallet.
5. Formal Citations
- Re Zipmex Co Ltd and other matters, , [2022] SGHC 196
6. Timeline
| Date | Event |
|---|---|
| Hearing date | |
| Judgment date | |
| Moratoria extended until this date |
7. Legal Issues
- Jurisdiction over Foreign Companies
- Outcome: The court determined that Singapore was the COMI for each of the entities, establishing substantial connection and allowing the court to exercise its jurisdiction under ss 64 and 65 of the Act.
- Category: Jurisdictional
- Sub-Issues:
- Establishment of substantial connection to Singapore
- Determination of the centre of main interests (COMI)
- Extension of Moratoria
- Outcome: The court granted an approximately three-month extension for each of the applications, allowing the Court to monitor progress and engagement.
- Category: Substantive
- Sub-Issues:
- Creditor support for the moratorium
- Prospect of a successful compromise or arrangement
8. Remedies Sought
- Extension of moratoria
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Insolvency
- Restructuring
11. Industries
- Financial Services
- Cryptocurrency Exchange
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re IM Skaugen SE and other matters | High Court | Yes | [2019] 3 SLR 979 | Singapore | Cited for guidance on the approach to be taken for moratoria applications under s 64 of the Insolvency, Restructuring and Dissolution Act 2018, and the interpretation of its predecessor, s 211B of the Companies Act. |
| Re Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener) | High Court | Yes | [2019] 4 SLR 1343 | Singapore | Cited for the principles regarding the determination of the centre of main interests (COMI) in the context of recognition of foreign proceedings. |
| Re Opti-Medix Ltd (in liquidation) and another matter | High Court | Yes | [2016] 4 SLR 312 | Singapore | Cited for the introduction and use of a common law notion of COMI in common-law recognition. |
| Re Pacific Andes Resources Development Ltd and other matters | High Court | Yes | [2018] 5 SLR 125 | Singapore | Cited for establishing substantial connection aside from COMI. |
| Re PT MNC Investama TBK | High Court | Yes | [2020] SGHC 149 | Singapore | Cited for the principle that there should be activities of some permanence or permanent effect to establish substantial connection. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 64 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 65 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 63 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 246(1) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 246(3) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 252(1) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act 1967 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Moratoria
- Substantial connection
- Centre of main interests
- COMI
- Zipmex App
- Trade wallet
- Fiat wallet
- Hosted wallet
- Z wallet
- ZipUp+
- Hot wallet
- Cryptocurrency
15.2 Keywords
- Insolvency
- Restructuring
- Moratorium
- Zipmex
- Cryptocurrency
- Singapore
- COMI
- Jurisdiction
16. Subjects
- Insolvency
- Restructuring
- Cryptocurrency
- Jurisdiction
- Moratorium
17. Areas of Law
- Insolvency Law
- Moratoria
- Cross-border insolvency