On Wednesday, a ground-breaking recovery plan was signed by stakeholders of the Australian cryptocurrency exchange Digital Surge and uncovered in documents viewed by CoinDesk. Just one day before liquidation would have been forced upon them, this significant move prevented that from happening, according to records presented to the ASIC (Australian Securities and Investments Commission). Creditors were informed through an official notification earlier today.
Digital Surge, Severely Affected by FTX’s Collapse, Will Continue Trading Next Week
There will be a revival of trading for the exchange next week, according to an individual who is knowledgeable about this matter. The Brisbane-based entity endured immense losses as it held 33 million Australian dollars in FTX before its downfall, led by Sam Bankman-Fried.
After much deliberation and hard work from knowledgeable specialists in the blockchain community, Michael Bacina, digital asset specialist and partner at Piper Alderman, declared that Australia has experienced its first successful restructuring of a cryptocurrency exchange. This feat acknowledges the outstanding cooperation between all parties involved within Australia’s blockchain sphere.
Digital Surge Has Been Working For A Recovery Plan For A Long Time
In December, Digital Surge transferred its power to licensed insolvency practitioners via voluntary administration. KordaMentha, a Melbourne-based investment firm, was chosen as the administrator during this assessment of their financial situation.
After Digital Surge’s creditors gave their vote of approval in late January 2023, the company and the administrators were tasked with signing off on a long-term recovery plan within 15 business days. Fortunately, they managed to sign all necessary documents before Wednesday arrived; consequently avoiding further legal complications that would’ve been required upon missing such a deadline. Under Australian law, there is no need for judges’ consent when it comes to decisions made by creditors.
Digital Surge’s Will Take A $1.25 Million Loan As Part Of Its Recovery Plan
As was previously mentioned, Digital Surge is to obtain a 1.25 million Australian dollars loan from an industry affiliate: Digico. The Directors have now provided this money to assist in business operations. Those customers with less than $250 will be fully reimbursed, and those above that total amount will receive 45% of their balance instantly, along with the remaining 55% over five years sourced from company profits according to the DoCA agreement.
David Johnstone, a KordaMentha administrator, expressed joy that this result will bring the highest yield for customers and creditors given these circumstances.
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