• Digital Surge creditors have agreed to a 5-year repayment plan following the company’s exposure to FTX.
• Customers with a balance of up to AU$250 will be repaid in full and those with a balance above that will receive 55% of their balance within the next few months.
• Digital Surge will receive a loan of AU$1.25 million (approx. US$885,000) from Digico, an associated business, to remain in operations.
Digital Surge, an Australia-based crypto exchange, has agreed to a rescue plan with its creditors to pay them over five years from the firm’s quarterly net profits. The agreement comes following the company’s exposure to FTX, an online trading platform which collapsed in November 2022.
Digital Surge had roughly $23 million in FTX which caused the company to suspend withdrawals and deposits for its 22,545 customers and enter into administration in December 2022. As part of the rescue plan, customers with a balance of up to AU$250 will be repaid in full and those with a balance above that will receive 55% of their balance within the next few months. The remaining balance will be repaid from Digital Surge’s quarterly profits over the next five years.
The firm will also receive a loan of AU$1.25 million (approx. US$885,000) from Digico, an associated business, to remain in operations. The proposal was put forward by Digico and Digital Surge directors Daniel Ritter and Joshua Lehman, and was approved by the firm’s administrator KordaMentha. It was said that the proposal provided a superior return and more certainty than liquidation.
Digital Surge has stated that they got involved with FTX because its directors believed that it would be beneficial to the company by providing liquidity for its customers. The company has since moved to ensure that this will not happen again, and has implemented strict risk management protocols.
The repayment plan is expected to be completed within the next five years and is said to be the best option for creditors. Digital Surge is hoping that the successful completion of the repayment plan will help to restore customer confidence in the platform and give them the assurance that their funds are safe.