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HomeNewsBitcoin: Aussie crypto exchange Digital Surge blocks withdrawals

Bitcoin: Aussie crypto exchange Digital Surge blocks withdrawals

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The dramatic collapse of cryptocurrency exchange FTX is continuing to impact Aussies with crypto holdings, with one Australian exchange now refusing withdrawals.

In a worrying email to customers, Brisbane-based cryptocurrency exchange Digital Surge announced they would be suspending deposits and withdrawals, explaining they had “some limited exposure to FTX”.

“Due to the impact of FTX Australia’s administration, we are not able to operate business as usual and have suspended all deposits and withdrawals until further notice,” the exchange wrote to customers, promising they would provide more details within the next two weeks.

“Digital Surge has always held a reserve of 1:1 for all user deposits, however due to our exposure to FTX, this is now unknown.

“We are reaching out to the US advisors for the FTX Group and will update customers as the situation continues to develop.”

“What happens now? What are we going to do with our money?” Sharon — a woman in her sixties with over $50,000 put away — told ABC News.

“I am really worried about what‘s going to happen next.”

Digital Surge has been silent in the week following its message to customers.

Other exchanges, including ByBit, have made announcements revealing their exposure to FTX amid its public scandal.

“Crypto exchange businesses are not regulated by ASIC and crypto assets are largely unregulated in Australia,” Australia’s corporate regulator ASIC said.

“ASIC is very concerned that Australians who invested in crypto may not have fully understood the risks and may have lost money in this year‘s collapse in valuations.

“ASIC has repeatedly warned investors that crypto is incredibly risky, inherently volatile and complex.”

Digital Surge has been contacted for comment.

As many as 30,000 Australians overall are missing “very significant” sums of money, according to FTX Australia’s administrators, with concerns the funds in accounts had no protections.

KordaMentha, which has been appointed to oversee the administration of FTX’s Aussie arm, revealed it had received more than 280 emails from customers desperate for information about their accounts and money.

In documents filed in the Supreme Court of Victoria, customers told administrators they believed they had between $US40,000 ($A60,000) and $US1 million ($A1.5 million) invested in FTX, but their accounts showed zero balances when they logged in.

One customer spoke about how he was seeking his $A83,000 investment back, while another said they were “financially crippled”.

“I want my money back,” another said in an email.

The $US32 billion ($A47 billion) cryptocurrency exchange filed for chapter 11 bankruptcy less than two weeks ago, along with around 130 affiliated entities, including controversial trading firm Alameda Research, which is alleged to have played a central role in the implosion.

Disgraced FTX founder Sam Bankman-Fried told former employees he is “deeply sorry” about the implosion of his crypto exchange – but continued to point the finger at the company’s bankruptcy filing, insisting that he could have saved the platform if given enough time.

He faces criminal investigation in the Bahamas and a potential trip to the US for questioning over the disappearance of billions of dollars in customer funds.

In Australia, administrators have uncovered $A3 million in the accounts of FTX Australia, which allowed trading and a further $A39 million in the accounts of FTX Express that was used for local customers to purchase crypto in Aussie dollars.

Story Credit: news.com.au

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