• FTX crypto exchange collapsed last year, causing a contagion among several companies exposed to the distressed exchange.
• Digital Surge, an Australian crypto exchange, lost access to its funds on the FTX platform.
• Digital Surge proposed a Deed of Company Agreement (DOCA) which requires the creditors’ approval, with the founders contributing $1 million from another private source to assist in repaying all customers.
The crypto exchange FTX suffered a major collapse last year, shaking the industry. This outcome caused a contagion among several companies exposed to the distressed exchange, including Digital Surge, an Australian crypto exchange. Digital Surge had about $23.4 million in digital assets on the FTX platform, and when the exchange collapsed, Digital Surge suspended withdrawals on its platform as a precautionary measure.
The firm then proposed a Deed of Company Agreement (DOCA) which required the creditors’ approval. The founders of Digital Surge, Daniel Rutter and Josh Lehman, agreed to contribute $1 million from another private source as a way of supporting their efforts in repaying all their customers. This agreement was communicated to the firm’s customers via email on December 8, 2022.
Furthermore, Digital Surge mentioned that it was working on all possible options to help recover its locked funds on FTX. It was a difficult situation for the firm, but it was determined to do whatever it could to make sure that its customers were compensated for their losses. The firm was also determined to try and minimize the impact of the FTX collapse on its customers.
Digital Surge was one of the companies that managed to survive the spreading contagion from FTX, and its efforts to help its customers recover their losses were successful. The firm’s proposed DOCA was approved by the creditors, and the founders’ contribution of $1 million allowed the firm to repay its customers in full. This was a major win for the firm, and it showed the resilience of the crypto industry in the face of a major collapse.