The cryptocurrency sector witnessed several tumultuous moments in 2022. The collapse of FTX, one of the prominent crypto exchanges, was one of the significant dips of the year.
The news of FTX’s demise has left many investors and users of the exchange in a state of anxiety. They scramble to recover their digital assets and protect themselves from further losses.
One of the exchanges affected by the FTX fallout is Australia’s Digital Surge. Digital Surge is a cryptocurrency exchange that allows users to buy, sell and trade digital assets.
A 5-Year Bailout Plan
At the time of the FTX collapse, the exchange had $23.4 million worth of digital assets tied up in the now-defunct crypto firm. At a local meeting on the 24th of January, Digital Surge creditors approved a five-year bailout plan to reimburse the 22,545 customers.
However, the customers must have locked their digital assets on the exchange since the 16th of November. The directors of the exchanges communicated with customers on the 8th of December in an email concerning the proposed rescue plan.
Through a “Deed of Company Arrangement,” an associated business, Digico, will give the crypto exchange a loan of 1.25 million Australian dollars ($884,543), allowing it to continue functioning. In addition, according to local media reports, creditors are to be paid out of the exchange’s quarterly net profits over five years.
The reports added that customers could receive their payouts in cryptocurrency or fiat currency, depending on the assets they possess. Digital Surge later confirmed that creditors had accepted the rescue plan during a discussion later that day.
Despite extensive involvement with FTX and the market turmoil, the exchange has developed a solid plan to reopen and avoid bankruptcy, an uncommon feat compared to other crypto companies.
BlockFi and Genesis, two crypto lending businesses, are two of the several crypto firms that declared Chapter 11 bankruptcy protection in November due to their links to FTX and the market instability.
A Wake-Up Call For Crypto Players
The recent collapse of FTX has been a wake-up call for the cryptocurrency industry, as it has highlighted the need for greater oversight and regulation in the industry. Meanwhile, Digital Surge has shown that it is possible to survive the collapse of a significant exchange, and it has done so without suffering substantial losses.
This development proves the exchange’s commitment to its users and ability to take the necessary steps to protect its digital assets. For now, Digital Surge is one of the few exchanges that have survived the fallout of the FTX’s sudden crash.