Shockwaves following the collapse of multi-billion dollar cryptocurrency exchange FTX have reached Australian shores, with a local exchange freezing withdrawals.
Brisbane-based firm Digital Surge said in an email to customers last week they were suspending all deposits and withdrawals because of some ‘limited’ exposure to the disgraced firm.
‘Digital surge has always held a reserve of 1:1 for all user deposits, however, due to our exposure to FTX Trading Limited, the exact reserve position is now unknown,’ the business said.
The exchange said the pause was being put in place ‘as a precaution’ while working towards a solution and they were exploring all options ‘including a contingency plan in case we are unable to recover assets’.
But Aussie investors who bought in during the height of the crypto craze are now growing increasingly ‘scared’ they could lose everything.
Self employed couple Sharon and Alan Saul, both in their 60s are staring down the prospect of losing $50,000 – about one quarter of their superannuation.
Australian crypto exchange Digital Surge said it suspended withdrawals and deposits because it was ‘partially exposed’ to FTX before it collapsed
In a letter, first published by CoinDesk, former CEO of the imploded FTX crypto exchange Sam Bankman-Fried (pictured) wrote in part: ‘I didn’t mean for any of this to happen’
‘What happens now? What are we going to do with our money?’ Sharon told ABC News.
‘I am really worried about what’s going to happen next.’
Digital Surge stores part of their cryptocurrency holdings with other trading platforms – including FTX, whose collapse has resulted in those assets being inaccessible.
The dollar amount Digital Surge has tied up with the failed exchange has not been revealed.
‘We are reaching out to the US advisors for the FTX Group and will update customers as the situation continues to develop,’ it said.
Daily Mail Australia has contacted Digital Surge for comment.
Other firms have made similar announcements in the wake of the FTX saga, including Singapore based ByBit and London-based crypto market maker Wintermute.
FTX, founded by Sam Bankman-Fried, filed for Chapter 11 bankruptcy on November 11 and the exchange is now under the control of an externally appointed CEO who blasted the company’s ‘complete failure of corporate controls’.
As many as 30,000 Australians had ‘significant’ funds invested with FTX which they can no longer access.
KordaMentha have been appointed administrators of FTX’s Australian business.
The Albany Bahamas Resort community, the location of several FTX employees’ homes, has been described as ‘the ultimate in luxury waterfront living in the Caribbean’ by listing agents
Australia’s financial watchdog ASIC recently warned Australians that the cryptocurrency market was ‘risky’.
‘Crypto exchange businesses are not regulated by ASIC and crypto assets are largely unregulated in Australia,’ it 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.’
In a letter sent Tuesday, and first published by CoinDesk, former FTX CEO Sam Bankman-Fried wrote that he was ‘sorry.
‘I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again. You were my family.’
His apology comes as the CEO faces a possible US Government investigation over allegations that he used FTX customer’s money to fund investment bets with Alameda Research, a sister company and trading firm run by his one-time girlfriend Caroline Ellison.
With 7,500 square feet, five bedrooms, 7.5 bathrooms and a pool directly in front of the master suite, it is the jewel in one of the highly secure community’s landmark buildings, The Orchid
His team of 10 close friends ran a glorified frat house out of his $40 million home in the affluent Albany district in the Bahamas, alleges the New York Post.
A local resident told the Post: ‘They would walk around in sweats and T-shirts. That was not the Albany lifestyle that residents there signed up for. The typical dress was Ralph Lauren sport jackets. Sam and his group did not seem to fit the part.’
The Post article details SBF and his staff pulling all-nighters while simultaneously partying and working.
Another source told the Post that during a crypto conference in the Bahamas in April: ‘[FTX Staff] were staying up all night and smelling like they hadn’t showered in weeks.’
Boutique bistro Cocoplum, just yards from FTX’s headquarters, told Fox News that Bankman-Fried spent $2,500 a day there on takeout deliveries, adding that he would spend an additional $7,500 a day elsewhere at other restaurants.
It is not known if SBF has been staying at the apartment full time since FTX filed for bankruptcy protection on November 11
In his sorrowful letter, the 30-year-old entrepreneur said that the company’s demise was related to a missing $8 billion and argued that he was against filing for bankruptcy this month because he believed he could save FTX.
He wrote: ‘We likely could have raised significant funding. Potential interest in billions of dollars of funding came in roughly eight minutes after I signed the chapter 11 docs.’
He says that he was pressured into filing for bankruptcy and that parts of FTX ‘were solvent.’
SBF wrote: ‘I reluctantly gave in to that pressure, even though I should have known better; I wish I had listened to those of you who saw and still see value in the platform, which was and is my belief as well.’
Since the collapse of FTX, SBF has repeatedly stated that he believes his company was not struggling in the manner the media depicted.
FTX filed for bankruptcy on November 11, the same day that SBF stepped down as CEO, sending shockwaves through the cryptocurrency industry, which has seen an enormous amount of volatility this year, including a sharp decline in the price of bitcoin and other digital assets.
But the sheer size of FTX’s collapse highlights the massive market risks inherent in the growing crypto industry. Billions of dollars of wealth may have been destroyed in a few days.
The circumstances have prompted investigations by the US Justice Department and Securities and Exchange Commission.
SBF was recently estimated to be worth $23 billion and has been a prominent political donor to Democrats. His net worth has all but evaporated, according to Forbes and Bloomberg, which closely track the net worth of the world’s richest people.
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