On Wednesday, Digital Surge’s stakeholders signed the exchange’s recovery plan right before it was slated to go into liquidation. As a result of their efforts, Australian Securities and Investments Commission (ASIC) submitted documents that allowed Digital Surge to come back online. Creditors were notified earlier today through a circular about this development.
After a tumultuous week, the Brisbane-based exchange is projected to relaunch trading next week. This follows an unsettling blow due to FTX’s collapse, leaving the organization with 33 million Australian dollars on Sam Bankman-Fried’s defunct platform.
Michael Bacina, digital asset specialist and partner at Piper Alderman, proudly declared this to be the first successful restructuring of an Australian cryptocurrency exchange. He recognized that digital assets present various legal issues addressed through collaboration between knowledgeable specialists – a testament to the strong sense of community emanating from the blockchain space in Australia.
At the end of December last year, Digital Surge took a voluntary approach to administration. This process entailed relinquishing control to licensed insolvency practitioners who thoroughly examined its economic status. As a result, Melbourne-based investment enterprise KordaMentha was appointed as administrator.
On Wednesday, the administrators and Digital Surge signed the documents for a long-term recovery plan before its 15-business-day deadline. Under Australian law, creditors’ approval is all that is needed to make it official and needs no permission from a judge.
It is essential to know that the exchange secured a loan of 1.25 million Australian dollars from Digico to fund its operations under a deed of company arrangement (DoCA). The Directors have now disbursed the amount as promised. Moreover, customers with balances below $250 will get their entire funds back, and those having more than that shall receive 45% right away, followed by 55% over five years out of profits earned by the firm.
David Johnstone, KordaMentha Administrator, joyfully proclaimed that “this is a remarkable outcome for all parties involved and will bring the most profitable return to customers as well as creditors during these uncertain times.”