Digital Surge Emerges As An Unusual Survivor Of The FTX Collapse

When the Australian crypto exchange shut down and FTX’s Australian subsidiary went into administration, it had $23.4 million worth of digital assets locked up on FTX.

Cryptocurrency exchange Australia Digital Surge appears to have barely escaped bankruptcy despite being affiliated to the now-defunct FTX crypto exchange.

Digital Surge’s creditors approved a five-year plan to save the exchange on January 24 (local time). Which will eventually pay back the 22,545 customers whose digital assets have been frozen on the platform since November 16. The plan will also keep the exchange running.

The exchanges’ directors sent an email to customers on December 8. The same day the company went bankrupt, to tell them about the plan to save it.

Digico would give the Australian crypto exchange $884,543, according to the “Deed of Company Arrangement” (1.25 million Australian dollars). It will allow the exchange to continue trading and operating.

In a statement, KordaMentha said that the exchange’s quarterly net profits would be used to pay creditors over the next five years.

According to a Jan 24 report from Business News Australia, KordaMentha said, “Customers will be repaid in cryptocurrency and fiat currency, depending on the asset compositionof their individual claims.”

Digital Surge announced that creditors approved the rescue plan at the second meeting on January 24.

“We expect further communication will be provided to all customers as the administration process with KordaMentha progresses,” it added.

In November, FTX collapsed, taking Brisbane’s crypto exchange with it. FTX Australia’s administration and bankruptcy froze withdrawals and deposits.

Digital Surge said they had “some limited exposure to FTX” and would let customers know in two weeks. However, according to Digital Surge’s administrator KordaMentha, this turned out to be around $23.4 million.

Despite FTX exposure, it was one of the few crypto firms with a viable plan to restart and avoid bankruptcy.

Due to FTX and market turbulence, numerous crypto businesses, including BlockFi and Genesis, have filed for Chapter 11 bankruptcy since November.