Australian Crypto Exchange Digital Surge to come back online after stakeholders sign recovery plan
Australian cryptocurrency exchange Digital Surge is set to return online after stakeholders signed off on the recovery plan on Wednesday, according to documents seen by CoinDesk.
The stakeholders signed the recovery plan the day before the exchange was due to go into liquidation, according to documents submitted to the Australian Securities and Investments Commission (ASIC). The creditors were notified earlier today through a circular.
The exchange is expected to resume trading next week, a source said.
The Brisbane-based exchange was hit hard by the collapse of FTX when it held A$33 million on the defunct platform founded by Sam Bankman-Fried.
This is the first successful restructuring of an Australian cryptocurrency exchange, according to Michael Bacina, digital asset specialist and partner at Piper Alderman. “Digital assets face challenging legal issues and it took hard work from knowledgeable specialists to get here. The agreement is a testament to the goodwill seen throughout the blockchain community in Australia,” Bacina added.
In December, Digital Surge entered voluntary administration, a process in which management hands over control to licensed insolvency practitioners who independently assess its financial situation. Melbourne-based investment company KordaMentha was appointed as administrators.
In late January 2023, creditors approved a long-term recovery plan for Digital Surge that still needed the company and administrators to sign on the dotted line within 15 business days. The documents were signed before the deadline expired on Wednesday.
Under Australian law, the approval of a judge is not required, as the creditors’ vote is what determines the outcome.
As previously reported, under a deed of company arrangement (DoCA), the exchange will receive a loan of A$1.25 million from an affiliate, Digico, to support the business. The company has now received the loan from the board.
According to DoCA, customers with less than $250 will be refunded in full, and others will receive at least 45% of the balance immediately and the remaining 55% over five years from the company’s profits.
“This is a great result for all stakeholders and provides the best possible return to customers and creditors given the circumstances,” said David Johnstone, KordaMentha administrator.
