Digital Surge creditors agree to 5-year repayment plan following FTX exposure Digital Surge creditors agree to 5-year repayment plan following FTX exposure
Digital Surge are set to repay customers with a balance of up to $250 AUD in full and balances above that 55% of their balance.
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Updated: Jan. 25, 2023 at 9:40 am UTC
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Australia-based crypto exchange Digital Surge creditors agreed to a rescue plan to pay them over five years from the firm’s quarterly net profits, according to Business News Australia (BNA) report.
Digital Surge was one of the firms impacted by FTX’s collapse in November 2022, according to the report. Digital Surge had roughly $23 million in FTX and immediately suspended withdrawals and deposits for its 22,545 customers — going into administration in December 2022.
Creditor rescue plan
The rescue plan would see customers with a balance of up to AU$250 repaid in full, while balances above that would be paid 55% of their balance within the next few months, according to the BNA report. The firm will repay the remaining balance from its quarterly profits over the next five years.
Digital Surge will receive a $1.25 million AUD loan (roughly $885,000 USD) from Digico — an associated business — to remain in operations, BNA reports.
Digico and Digital Surge directors Daniel Ritter and Joshua Lehman proposed the rescue plan, according to the report. The firm’s administrator KordaMentha said the proposal was the best option for creditors as it provided a superior return and more certainty than liquidation.
Digital Surge said it got involved with FTX because its directors felt the Sam Bankman-Fried-led exchange was reputable, the Guardian reported.
The firm also cited the investments made into FTX by venture capitalists, it’s marketing, and the fact that it held an Australian Financial Services Licence (AFSL).
Any funds recovered from the FTX situation would be distributed to the exchange’s creditors, according to the Guardian’s report.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.