What if the platform you trusted with your life savings quietly sent your money to high risk lenders without telling you?
It sounds like a plot twist from a Netflix documentary.
Except it happened. Recently. And the fallout is still spreading.
Zipmex was once celebrated as the rising star of Southeast Asian crypto. Investors called it the Coinbase of the region. Banks backed it. Regulators approved it. Users loved it.
Then 53 million dollars of customer funds evaporated.
This is the story of how a “regulated” exchange fell apart overnight. More importantly, it is a warning about what due diligence really means in a world where branding often hides the truth.
The Rise: Big Names, Big Promises
In 2021, Zipmex looked unbeatable. It raised 41 million dollars from heavyweight investors including Krungsri Finnovate and B Capital. The founders were a perfect pairing. One was a fundraising machine. The other was deeply connected to the regulatory scene.
Everything looked clean and legitimate.
And that is exactly why so many people trusted it.
ZipUp+ became the star product. Users were offered 10 to 14 percent annual returns on their crypto. Just move your funds from the Thai entity to the Singapore entity. Click, transfer, relax.
It felt easy. Too easy.
Many users assumed the returns came from institutional trading volumes or treasury management. Few realised their money was being redirected to leveraged crypto lenders chasing yield far beyond the risk appetite of the average customer.
The Hidden Risk No One Spotted
Behind the scenes, Zipmex was sending customer funds to Celsius and Babel Finance. Both were aggressive players in the yield farming world. Babel was known for large bets during bull runs. Celsius promised outsized returns that many insiders quietly questioned.
These companies were not banks.
They were not insured.
They were not stable.
But users were never clearly told that their savings were sitting inside high risk lending pools.
This is where the first fatal mistake of Zipmex becomes obvious. A regulated exchange does not automatically make every product safe. Regulation often applies to the core platform, not the auxiliary financial products attached to it.
ZipUp+ fell into the second category.
Most users had no idea.
The Dominoes Fall
In June 2022, Celsius suddenly froze withdrawals. Five days later, Babel halted redemptions. Both were drowning after the collapse of Terra and Three Arrows Capital.
Zipmex had 48 million dollars with Babel and another 5 million with Celsius.
When they went underwater, so did Zipmex.
On 20 July 2022, Zipmex froze withdrawals. Screenshots spread across Twitter. Telegram groups exploded. People who believed their funds were safe found out their fate in a single announcement: “Temporary suspension of withdrawals”.
Temporary was never really temporary.
The Failed Rescue That Made Everything Worse
There was a moment of hope when V Ventures promised to acquire Zipmex for 100 million dollars. The deal would have saved customers and restored confidence.
Then the first payment was delayed.
Then the second.
Then the third.
Eventually, V Ventures walked away.
It became clear that no one was going to save the platform. Court documents soon revealed the scale of the shortfall. Creditors would get only 5.1 percent back under the rescue plan. Liquidation would give them as little as 1.6 percent.
Imagine putting your savings into what you believed was a regulated exchange and getting less than two percent back. It is the kind of loss that changes how you view the entire industry.
The Legal Fallout Arrives
In February 2025, Akalarp Yimwilai, Zipmex’s co founder and the face of its regulatory credibility, was sentenced to five years in prison. Authorities discovered that customer funds were moved offshore before terms and conditions were updated. The Thai SEC called it deception.
The message was loud and clear.
Regulation does not guarantee integrity.
People do.
What This Means for Anyone Using Crypto Platforms
You do not need to be a crypto expert to learn something valuable from this story. The biggest takeaway is simple. Always look beyond the branding. Beyond the licences. Beyond the pitch about being a safe, regulated exchange.
Here are practical checks anyone can use:
- Ask where yields come from
If returns are above traditional market rates, the money is coming from somewhere. That “somewhere” is usually leverage, risky lending, or speculative trading. - Check who holds custody
If a platform redirects assets to third party lenders, you deserve to know exactly who they are. - Search for independent audits
Marketing audits are not enough. Look for real proof of reserves and transparent reporting. - Read user agreements
Yes, they are dull. Read them anyway. Many platforms hide the real risks inside a paragraph no one notices. - Trust behaviour over branding
A platform that changes terms after moving funds has already told you everything you need to know.
Final Thoughts
Zipmex did not fall because of bad luck. It fell because customer funds were exposed to risks they never agreed to take. The moment the wider crypto lending ecosystem collapsed, there was no safety net.
The story matters because it shows how easy it is for a platform to look secure on the surface while operating in ways that customers never imagined beneath it. And in a market as fast moving as crypto, transparency is not a luxury. It is the only real protection users have.
If you want the deeper lesson, it is this.
High returns are never free.
Someone is always taking the risk.
Make sure it is not you, without your knowledge.
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