Australia-based crypto exchange Digital Surge is expected to make a comeback following the signing of the recovery plan on Wednesday, according to CoinDesk. Documents provided to the Australian Securities and Investments Commission (ASIC) reveal that stakeholders signed the recovery plan a day before the exchange was slated for liquidation. Creditors were alerted of the news earlier today via a circular.
A source with knowledge of the matter has stated that the exchange is anticipated to resume trading next week. The platform was severely impacted by the demise of FTX, as it owned 33 million Australian dollars on the defunct platform.
Michael Bacina, the digital asset specialist at Piper Alderman, has commented that this is the first successful restructuring of an Australian exchange platform. He went on to say that “digital assets face challenging legal issues, and it took the hard work of knowledgeable specialists to get here. The deal is a testament to the goodwill seen throughout the blockchain community in Australia.”
Digital Surge went into administration in December, a process in which the management transfers authority to professional insolvency practitioners who analyze the company’s financial status independently. KordaMentha, an investment firm located in Melbourne, was appointed administrator.
In late January 2023, creditors accepted a long-term recovery plan for Digital Surge that required the firm and the administrators to sign on the dotted line within 15 working days. The document was signed before the deadline closed on Wednesday. Under Australian law, a judge’s permission is unnecessary, as the creditors’ vote determines the decision.
As previously reported, under DoCA, the exchange would receive a loan of 1.25 million AUD from a related business, Digico, to sustain the business. The loan has now been received from the Board of Directors. Clients with less than $250 would be returned in full, while those with more than $250 will get at least 45% of their amount immediately, and the remaining 55% over five years from the company’s revenues.
David Johnstone, KordaMentha administrator, has expressed his pleasure at the outcome. He said, “This is a great result for all stakeholders and provides the best possible return to customers and creditors given the circumstances.”
The news of Digital Surge’s return is welcomed by the blockchain community in Australia. After months of uncertainty and financial losses, the exchange is finally on the road to recovery. The signing of the recovery plan is a testament to the hard work of the administrators and the goodwill of the blockchain community in Australia.
The recovery plan is a significant step forward for Digital Surge and its customers. The exchange is expected to resume trading next week, and customers will be able to access their funds. The loan from Digico will also ensure that the exchange remains operational in the long-term.
The successful restructuring of Digital Surge is a positive example for other exchanges in Australia and around the world. It is a reminder that, with the right approach, businesses can be saved from insolvency and customers can get back the funds they are owed. The blockchain community in Australia has shown that it is possible to come together and work towards a common goal, even in the face of challenging legal issues.