• Australian cryptocurrency exchange Digital Surge passes into corporate administration to continue as a going concern amid FTX collapse.
• The company’s creditors have approved the bailout plans, which will see the company pay its 22,545 consumers.
• Investigations into the company reveal that the directors of the company acted in good faith with no connection to fraud; however, there are doubts surrounding an employee.

The FTX implosion last year led to a string of similar crashes as a result of ties to the exchange that led to staggering losses and thousands of disappointed investors.

Digital Surge, a Brisbane-based cryptocurrency exchange, will continue to operate after its investors agree to a long-term deal to keep the company afloat while it recovers from the crisis. losses from FTX. The company’s unfortunate event began when it transferred $33 million in assets to FTX two weeks before its collapse in November.

In order to satisfy all competing interests effectively, the company went into administration in December, and in a report released last week by KordaMentha, the company’s administrators, it was revealed that the company had 22,545 customers at the time of administration. .

The second meeting of creditors gave the company the lifeline it needed as they approved several restructuring proposals, Business News Australia reported. First, a $1.25 million loan from Digico was approved, allowing the company to continue operating.

The company’s deed agreement shows that clients with less than $250 will receive full payment, while those with more than $250 will receive 55% of their assets in the coming months. Clients will be paid in digital or fiat currency as they choose, but the 44% balance will be spread over five years and paid out of the exchange’s quarterly profits.

Investigations accuse an employee

As a matter of course in corporate management, KordaMentha conducted an investigation into the affairs of the company. It was revealed that before FTX filed for bankruptcy, $6.5 million was withdrawn from Digital Surge along with $31,000 by five employees.

Following investigations, the firm concluded that the company’s directors acted in good faith without breaching their duties, but the performance of an employee was questionable. The employee, whose name was withheld, withdrew $1.6 million worth of Bitcoin and Australian dollars despite being aware of the company’s exposure to FTX, thereby making a profit on other creditors.

On the directors side, they claimed that they transferred funds to FTX because they believed it to be a trusted exchange at the time, as FTX had an Australian Financial Services License.