Brisbane Digital Surge Crypto Exchange Collapses

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Brisbane-based cryptocurrency exchange Digital Surge has collapsed in administration, suspending more than 30,000 user accounts after being caught by the fall of struggling international exchange FTX.

KordaMentha directors were named to the company on Thursday. Exchange customers have been unable to access their funds for the past two weeks as the company announced in late November that it was suspending accounts.

Brisbane-based cryptocurrency exchange Digital Surge has collapsed in administration, suspending more than 30,000 user accounts. Credit: Getty

This was due to the company holding some of its Australian dollar and crypto assets on FTX to facilitate transactions. FTX collapsed dramatically last month after it was revealed that the company did not have sufficient funds for its clients.

In a statement, KordaMentha administrator Scott Langdon said Digital Surge entered administration to protect the interests of customers and creditors, praising the cooperation of the company’s administrators.

In a separate statement Friday, Digital Surge chief executive Dan Rutter said the administration was needed to let the company’s administrators go ahead with an unorthodox proposal that would mean users would be bailed out by owners. of the company.

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Rutter’s proposed deed of arrangement for the company would include a $1 million out-of-pocket payment from directors, all company profits to be paid out to customers over the next five years, and accounts with a balance. less than $250 to be paid in full first.

The goal and purpose is to provide an opportunity for creditors to recover over time and preserve their digital assets as much as possible, Rutter said.

There is no denying that this has been an extremely difficult and upsetting time for everyone in the cryptocurrency industry. We have always operated with our users’ best interests at heart, including the decision to enter into this process.

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