Brisbane-based crypto exchange firm Digital Surge confirmed its collapse days after suspending operations. Digital Surge announced halting all deposits and withdrawals, citing contagion from the FTX debacle.
The crypto exchange set shop in 2017 to allow Aussies access to over 300 digital currencies. Headquartered in Brisbane, Digital Surge admitted using the embattled FTX’s platform to execute some trading.
Digital Surge Suspends Operations
Its collapse leaves the digital wealth of investors estimated at 30000 unable to access, transfer or dispose of their digital wealth.
Digital Surge’s decision affirms the initial speculations the crypto exchange was battling a liquidity crunch since FTX filed for Chapter 11 bankruptcy. While the crypto firm’s management has not admitted direct exposure to FTX Group, the announcement attributed the collapse to the shockwaves that hit the digital assets sector.
The temporary suspension of all operations by Digital Surge leaves its 30,000 customers in ruin weeks after other Australians suffered a similar fate when FTX sought Chapter 11 protection in a New York District court.
Digital Surge Confirmed Appointing an Administrator
Unlike the FTX case, where collapse prompted the multi-dollar exchange to file for bankruptcy, Digital Surge decided to pursue voluntary administration. The Australian crypto exchange confirmed appointing KordaMentha Restructuring as its administrator.
Scott Langdon issued a subsequent confirmation from KordaMentha Restructuring firm. The KordaMentha partner calmed Digital Surge customers concerned over the fate of their digital wealth amidst the uncertainty of the voluntary administration.
Langdon assured the thousands of Digital Surge customers of issuing proactive updates to fully inform them of the progress realized in the voluntary administration.
ASIC Warning against Crypto Exchanges
Digital Surge collapsed after Australia’s watchdog agency portrayed the cryptocurrency market as risky. In a recap of the FTX downfall, ASIC attributed the collapse to poor management, revealed in the ongoing bankruptcy proceedings that then chief executive Bankman-Fried allegedly bet on users’ funds.
ASIC condemned the decisions by Australians who committed to invest in the crypto assets via the centralized crypto exchanges. The agency disclosed that ASIC never regulated the crypto exchange operations in Australia.
ASIC indicated the cryptos remained inherently risky, complex and volatile for Australians to invest without adequate understanding.
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