Digital Surge plans to return customer funds over the next five years.
Digital Surge, a Brisbane-based cryptocurrency exchange established in 2017, will continue to operate after its creditors have approved its five-year bailout plan.
According to the news report shared by Business News Australia, the bailout plan notes that Digital Surge plans to refund its customers while still operating.
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The “Deed of Company Arrangement” revealed that Digital Surge will receive a loan of $884,543 (around 1.25 million Australian dollars) from an associated business, Digico. The news report highlighted that this loan will allow “to keep <Digital Surge> running.”
At the beginning of December, the crypto exchange fell into administration. The company froze customer assets on November 16th, days after crypto exchange FTX filed for bankruptcy. At that time, Digital Surge claimed it had “some limited exposure to FTX.” The initial rescue plan was revealed by exchange investors on December 8th through an email to customers.
The administrators of KordaMentha Restructuring, the company working on stabilizing and restructuring companies dealing with financial distress, noted:
Customers will be repaid in cryptocurrency and fiat currency, depending on the asset composition of their individual claims. The exact value of this amount will depend on the value of the total pool of cryptocurrencies on the date creditors are repaid.
Nevertheless, the KordaMentha noted that creditors will be paid “over the next five years out of the quarterly net profits of Digital Surge."
Digital Surge confirmed that creditors voted in favor of the rescue plan and added:
We expect further communication will be provided to all customers as the administration process with KordaMentha progresses.
The Australia-based crypto exchange is one of the more successful firms, which managed to formulate a solid restructuring plan and avoid liquidation despite having exposure to crypto exchange FTX. Since the fall of FTX, several crypto firms, including BlockFi and Genesis, filed for Chapter 11 bankruptcy.
