Digital Surge Avoids Contagion, Returns Funds to Customers After FTX Bankruptcy

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• FTX exchange filed for bankruptcy, causing a contagion among other companies exposed to it, including Digital Surge.
• Digital Surge suspended withdrawals on its platform as a precaution, and worked on options to recover its locked funds.
• The firm proposed a Deed of Company Agreement, requiring creditors‘ approval, and founders promised to compensate customers for their assets on the platform.

The crypto industry was sent into shockwaves last year when one of the top exchanges, FTX, filed for bankruptcy. Many investors and firms had their funds locked on the platform, and the contagion spread to other companies exposed to the distressed exchange. One of these companies was Digital Surge, an Australian crypto exchange, who had over $23.4 million in digital assets locked on FTX.

In an effort to protect its customers and their funds, Digital Surge suspended withdrawals on its platform as a precautionary measure. The firm further reported that it was doing everything in its power to find a way to recover the funds locked on FTX. To this end, they proposed a Deed of Company Agreement (DOCA) which required the creditors‘ approval.

Digital Surge’s founders, Daniel Rutter and Josh Lehman, were determined to restore their customers‘ confidence in the platform and promised to compensate them for their assets on the platform. To demonstrate their commitment, the founders pledged to contribute $1 million from a private source to the firm for the purpose of repaying all their customers.

The crypto industry was heavily impacted by the collapse of FTX last year, and the situation seemed to be dire for Digital Surge and its customers. However, due to the swift and decisive action taken by the firm, its customers were able to get their funds back and the contagion was avoided. Digital Surge’s founders should be commended for their commitment to their customers and for making sure that their funds were recovered and returned to them safely.