The Brisbane-based cryptocurrency exchange will continue to operate after its creditors agree to a long-term plan from its administrators, continuing operations as it seeks to recover from the global crash. FTX.
digital surge Launched last December It’s the result of the company transferring $33 million worth of assets to global platform FTX just two weeks before its spectacular collapse in November.
A report released last week by administrator KordaMentha, who also manages Australia’s FTX, revealed that Digital Surge had 22,545 customers in their accounts worth 0.01 cents or more when they took control.
Some of the self-managed super funds listed as business creditors had between $140,000 and $233,000 invested in the platform.
At a second four-hour meeting of creditors in Brisbane on Tuesday, creditors finally agreed with plans to keep Digital Surge operational and pay back what they owe most of their customers over the next five years. Agreed.
Proposed by Digico and Digital Surge directors Daniel Ritter and Joshua Lehman, Digico will finance Digital Surge $1.25 million to keep the company running.
Customers with less than $250 in digital wallets will receive a full refund, and the rest will receive 55% of their balance over the next few months. Customers will be paid in virtual currency or fiat currency depending on their holdings. The rest will be repaid in regular currency over the next five years from quarterly profits made by Digital Surge.
Funds generated from FTX’s management process will also be distributed from the management to Digital Surge’s creditors.
All employees remain employed with their rights preserved. The manager recommends this option as it allows the company to continue operating and will improve the return of funds to creditors.
According to management reports, between the time FTX went bankrupt on November 11, 2022 and the time Digital Surge’s platform was shut down, $6.5 million, including more than $31,000 by five employees, went to Digital Surge’s platform. pulled from
Management confirmed that the directors had not violated their duties, but questions were raised about the conduct of one employee. The manager discovered that an employee or representative of the self-managed superfund had withdrawn $1.6 million worth of her in Australian dollars and bitcoin.
Management said an unnamed employee confirmed that Digital Surge was aware of the FTX exposure. They argued that the employee received a direct benefit over other creditors through withdrawals based on that information, which had a “significant impact” on the company’s ability to repay customers in full.
The employee’s attorney told the manager that even though he was acting in good faith and knew that Digital Surge had contacted FTX, the employee feared Digital Surge would become insolvent. I said not enough to speculate that I have reason to doubt. Management disagreed.
As to why Digital Surge signed up for FTX just weeks before the company’s bankruptcy, a creditor’s report said the directors shared their personal experience with using the platform, the venture capital firm behind FTX, and the company’s marketing. And so on, FTX has made it clear that he thought it had a good reputation. FTX held an Australian Financial Services License (AFSL).
Guardian Australia said last year that its regulator, the Australian Securities and Investments Commission, We have not evaluated the suitability of FTX Possess a license at the time of obtaining a license when taking over another company.
The reason the company sent so much money to FTX at the time was because of the low transaction fees it offered to its customers.
FTX’s disgraceful CEO, Sam Bankman-Friedhe pleaded not guilty to criminal charges of defrauding investors and is currently at his parents’ home in California on $250 million bail.
https://www.theguardian.com/technology/2023/jan/24/australian-crypto-exchange-digital-surge-saved-after-125m-loan-from-creditors Australian Cryptocurrency Exchange Digital Surge Saved With $1.25 Million Loan From Creditors | Cryptocurrencies