Australian cryptocurrency exchange Digital Surge has signed a successful restructuring plan after being hit hard by the collapse of FTX, according to documents seen by CoinDesk. The stakeholders signed the recovery plan a day before the exchange was set to go into liquidation, and creditors were notified earlier in the day through a circular. The Brisbane-based exchange is expected to resume trading next week.
In December 2022, Digital Surge entered into voluntary administration, a process where management hands over control to licensed insolvency practitioners who independently assess the company’s financial situation. Melbourne-based investment firm KordaMentha was appointed as administrators. Later in January 2023, creditors approved a long-term recovery plan for the company, but it still needed to be signed by the company and administrators within 15 business days. Fortunately, the documents were signed before the deadline ended on Wednesday.
According to a deed of company arrangement (DoCA), Digital Surge will receive a loan of 1.25 million Australian dollars from an associated business, Digico, to support its operations. The company has now received the loan from the Directors. Under Australian law, the approval of a judge is not required, as the vote of the creditors decides the outcome.
According to the DoCA, customers with balances under $250 will be repaid in full, and others will receive at least 45% of their balance immediately, and the remaining 55% over five years from the profits of the company. This marks 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 the hard work of knowledgeable specialists to get here. The deal is a testament to the goodwill seen throughout the blockchain community in Australia,” Bacina added. KordaMentha Administrator David Johnstone also expressed satisfaction with the result, stating that “this is a great result for all stakeholders and provides the best possible return to customers and creditors given the circumstances.”
