Australian crypto exchange Digital Surge has emerged as a rare survivor of the FTX bankruptcy saga after creditors approved a long-term rescue plan to keep the business running.
Digital Surge emerges as rare survivor amid FTX fallout
According to reports, Digital Surge creditors had approved a five-year bailout plan to eventually reimburse the 22,545 customers whose digital assets have been frozen on the platform since Nov. 16 while allowing the exchange to remain operational.
Per a deed of company arrangement (DoCA), Digital Surge will receive a loan of 1.25 million Australian dollars from the associated business Digico allowing the exchange to continue trading and operating.
Customers with less than $250 in their digital wallets will be repaid in full, while others will receive at least 55% of their balance over five years.
Customers will be reimbursed in either cryptocurrency or fiat currency, depending on how much of each they hold. The remainder will be repaid in regular currency over the next five years from any quarterly profits Digital Surge makes.
FTX owes $33m to Digital Surge
Digital Surge filed for bankruptcy in December of last year after transferring $33 million in assets to global platform FTX just two weeks before that company’s spectacular fall in November. The company’s reasoning for transferring such a large amount to FTX at the time was the lower transaction fees it would offer customers.
The spectacular failure of FTX and its former billionaire, Sam Bankman-Fried, who was extradited to the US to face fraud and conspiracy charges, has triggered the equivalent of a global bank run in the cryptocurrency market.
Since November, several crypto firms, including crypto lending firms BlockFi and Genesis, have filed for Chapter 11 bankruptcy protection due to exposure to FTX and market turmoil.
Sam Bankman-Fried, the disgraced CEO of FTX, has pleaded not guilty to criminal charges that he defrauded investors and is currently out on $250 million bail at his parents’ house in California.