Aussie crypto exchange collapses on the heels of FTX debacle – leaving tens of thousands of investors in ruin
- Australian cryptocurrency exchange Digital Surge collapsed into administration
- It comes after Brisbane-based firm suspended all deposits and withdrawals
- Move came after FTX filed for bankruptcy on November 11 sending shockwaves
Australian cryptocurrency exchange Digital Surge has fallen into administration just weeks after the collapse of multi-billion dollar crypto exchange FTX.
Some 30,000 Australian customers are now unable to move or withdraw money on the trading platform.
It comes after the Brisbane-based firm was forced to temporarily suspend all deposits and withdrawals last week following the collapse of FTX.
Australian cryptocurrency exchange Digital Surge has fallen into administration just weeks after the collapse of multi-billion dollar crypto exchange FTX (stock image)
Some 30,000 Australian customers are now unable to move or withdraw money on the trading platform (stock image)
FTX, which is based in the Bahamas, filed for Chapter 11 bankruptcy on November 11 following poor management and allegations former FTX CEO Sam Bankman-Fried used customer’s money to fund investment bets with Alameda Research.
Digital Surge was created in 2017 and allowed customers to access 300 digital currencies and used the FTX platform for some of its trading.
KordaMentha Restructuring have been appointed as administrators following the collapse of the trading platform.
‘We fully appreciate the uncertainty the voluntary administration will create,’ KordaMentha partner Scott Langdon said.
‘We will proactively and regularly communicate with customers to ensure they are fully informed on the progress of the administration.’
Australia’s financial watchdog ASIC recently warned Australians that the cryptocurrency market was ‘risky’.
‘Crypto exchange businesses are not regulated by ASIC and crypto assets are largely unregulated in Australia,’ it said.
‘ASIC is very concerned that Australians who invested in crypto may not have fully understood the risks and may have lost money in this year’s collapse in valuations.
‘ASIC has repeatedly warned investors that crypto is incredibly risky, inherently volatile and complex.’
It comes after the Brisbane-based firm was forced to temporarily suspend all deposits and withdrawals following the collapse of FTX (pictured, former CEO of the imploded FTX crypto exchange Sam Bankman-Fried)
In a letter sent last Tuesday, and first published by CoinDesk, former FTX CEO Sam Bankman-Fried wrote that he was ‘sorry.
‘I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again. You were my family.’
His apology comes as the CEO faces a possible US Government investigation over allegations that he used FTX customer’s money to fund investment bets with Alameda Research, a sister company and trading firm run by his one-time girlfriend Caroline Ellison.
His team of 10 close friends ran a glorified frat house out of his $40 million home in the affluent Albany district in the Bahamas, alleges the New York Post.
A local resident told the Post: ‘They would walk around in sweats and T-shirts. That was not the Albany lifestyle that residents there signed up for. The typical dress was Ralph Lauren sport jackets. Sam and his group did not seem to fit the part.’