So the first meeting of creditors with the administrator Korda Mentha took place last week, there are still plenty of outstanding questions, and further information to come out, but what I found most disturbing and interesting was the timeline below which has just been made apparent:
- Digital Surge forms partnership with FTX in Oct 2022
- Digital Surge transfers funds to FTX on 9 Nov 2022, so prior to this date all trades and holdings were not with or through FTX
- The funds & crypto Digital Surge transferred to FTX would have been taken from either custodial wallets, or from other exchanges (e.g. Binance)
- Therefore, prior to Nov 9th, those funds were actually safe, clean & available
- Initially when deposits and withdrawals were suspended, we were told by the founders they had 'limited exposure' to FTX, and it was a precautionary measure
- We now find out 52% of Digital Surge's (customer) assets had been transferred to FTX just days before the collapse, and that the transfer occurred AFTER initial concerns were raised about FTX
We will find out more I am sure, what if anything we as customers will get back remains to be seen, there is 48% of funds left, but this will be eaten into with administrator and lawyers fees. Hopefully if negligent actions have occurred, then the culprits will also be brought to justice.
Read my initial article on the collapse here: https://www.publish0x.com/frmkii-random-crypto-musings/collapse-of-australian-exchange-digital-surge-xjrxqlq
