Collapsed Australian Crypto Exchange Digital Surge Owes FTX $33 Million | Company

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Collapsed Australian crypto exchange Digital Surge owes FTX, one of the largest cryptocurrency platforms in the world, $33 million before its collapse in November.

Brisbane-based Digital Surge went into administration earlier this month with more than half of its digital assets deposited with FTX.

The dramatic downfall of FTX and its former billionaire founder Sam Bankman-Fried, who was extradited to the United States for fraud and conspiracy, has sparked the cryptocurrency equivalent of a global banking race.

The 30-year-old faces eight counts related to his role in the collapse of the crypto exchange, which carry a maximum sentence of 110 years.

Documents filed with the Australian Securities and Investments Commission (Asic) revealed that Digital Surge had $55.4 million in digital assets when it entered administration.

Administrator KordaMentha estimated the value of the remaining assets of the FTX group of companies at $33 million.

Administrators have secured $26,800,985 of company-controlled digital assets. We also got $4,625,922 in cash, KordaMentha told creditors.

Asic’s papers also revealed that Digital Surge owed $1.05 million in secured debt to a company called DigiCo.

KordaMentha has already received hundreds of emails from clients left behind by FTX’s collapse, with some reporting losses worth hundreds of thousands of dollars.

At this time, administrators are unable to estimate the expected return to creditors, the company said.

Digital Surge directors are working with stakeholders to prepare a rescue plan, though little is known about the plan, with directors only receiving a high-level summary.

The company’s future will be determined by its creditors, according to the KordaMentha document.

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Client accounts were frozen by Digital Surge on Nov. 16, and trades were still blocked Friday morning.

Digital assets secured by administrators will continue to remain frozen during the administration process, KordaMentha told creditors.

All assets in the company’s possession at the time of our appointment, including cryptocurrency and fiat currency, are now under the control of the administrators.

KordaMentha Partner Scott Langdon said he was pleased with the cooperative approach taken by Digital Surge administrators.

We fully appreciate the uncertainty the voluntary administration will create, Langdon said.

We will communicate proactively and regularly with clients to ensure they are fully informed of the progress of the administration.

The federal government is expected to introduce legislation to regulate cryptocurrency in 2023.

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