Friday, December 1, 2023

Cryptocurrency exchanges The digital boom is emerging as a rare survivor of the FTX fallout


The Australian cryptocurrency exchange’s digital boom appears to have narrowly escaped crashing, despite millions of dollars of digital assets tied up on now-bankrupt cryptocurrency exchange FTX.

in january. 24 local time, Digital Surge’s creditors have approved a five-year rescue plan, which ultimately aims to recover 22,545 customers whose digital assets have been frozen on the platform since November 11. 16, with the stock exchange allowed to continue operating.

The bailout was first laid out to clients by exchange managers via email on Dec. 3. 8, the same day the company entered administration.

According to a “company contract arrangement,” the Australian cryptocurrency exchange will receive a loan of $884,543 (AU$1.25 million) from an associated company, Digico — allowing the exchange to continue trading and operating.

In a statement, KordaMentha officials stated that creditors will be paid over the next five years from the exchange’s quarterly net profits.

“Customers will be paid in cryptocurrency and fiat currency, depending on the asset composition of their individual claims,” KordaMentha said, according to Jan. 28. Report 24 from Business News Australia.

Cointelegraph reached out to Digital Surge, which confirmed this at its second meeting of creditors on January 3rd. On September 24, a resolution was voted in favor of the bailout.

“We expect to provide more communications to all customers as the management process with KordaMentha progresses,” she added.

The Brisbane-based cryptocurrency exchange had been operating since 2017 but became one of the victims of the FTX crash in November, freezing withdrawals and deposits just days after FTX filed for bankruptcy and put FTX Australia under administration.

At the time, Digital Surge indicated that they had “some limited exposure to FTX” and would update customers within two weeks — though this was later revealed to be around $23.4 million, according to Digital Surge official KordaMentha.

Related: ‘There Will Be More Zeros’ – Kevin O’Leary on FTX-like Meltdowns in the Future

The exchange was one of the few crypto companies that put in place an aggressive plan to restart operations and avoid liquidation despite significant exposure to FTX.

Since November, several crypto companies, including crypto lenders BlockFi and Genesis, have filed for Chapter 11 bankruptcy protection as a result of exposure to the FTX fallout and market turmoil.