Australian Crypto Exchange Enters Voluntary Administration
Australian cryptocurrency exchange Digital Surge has entered voluntary administration, leading to the suspension of approximately 30,000 Australian customer accounts.
Established in 2017, Digital Surge facilitated cryptocurrency trading for Australian enthusiasts, allowing transactions with assets like Bitcoin and Ethereum.
Administrator Scott Langdon emphasized that Digital Surge’s directors are cooperating in the process, prioritizing customer interests.
Acknowledging the uncertainty arising from the voluntary administration, Langdon assured proactive and regular communication to keep customers informed.
The situation has left many customers in suspense, including those who have savings and superannuation tied up with the platform.
ABC news interviewed Kamal Jain, who had over $150,000 of his superannuation locked in a Digital Surge account, expressing frustration and helplessness.
The collapse of FTX has led to a series of cryptocurrency exchange disruptions, such as Brisbane-based Swyftx laying off 35% of its workforce and experiencing a downturn in profits.
CoinJar, another Australian-founded exchange, recently laid off 20% of its staff, and international derivatives exchange ByBit announced a 30% workforce reduction due to the FTX impact.
Digital Surge customers affected by FTX’s collapse await further details on how much of their funds are impacted by the situation.
The company outlined a “proposed rescue plan” in recent communications with clients, aiming to sustain operations with the creditors’ decision.
If creditors opt to salvage the company, Digital Surge’s CEO, Dan Rutter, pledged a payment exceeding $1 million and committed future profits for the next five years to address customer balances.
Despite the proposed plan, affected individuals remain cautious, with Kamal Jain expressing skepticism about the offered terms.
Creditors, including investors, are scheduled for the initial meeting in eight days. Administrations of companies undergoing such processes can extend for months or even years.
The collapses of FTX and now Digital Surge underscore the lack of cryptocurrency sector regulation in Australia, prompting concerns from the Australian Securities and Investments Commission (ASIC).
ASIC emphasized the absence of regulations for crypto exchange businesses and assets in Australia, cautioning investors about the inherent risks and volatility in the crypto space.
The Australian government is contemplating tighter regulations to govern this decentralized form of trading.
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