(Kitco News) –
Crypto exchange Liquid suspended all withdrawals from their platform early Tuesday morning.
“Fiat and crypto withdrawals have been suspended on Liquid Global in compliance with the requirements of voluntary Chapter 11 proceedings in the United States,” the company posted in a tweet. “Until further notice, we would suggest to not deposit either fiat or crypto.”
The company did not say when customers could expect updates.
Liquid is the latest crypto firm to be swept up in the aftermath of last week’s spectacular collapse of FTX and Alameda Research. FTX bought Liquid in February for an undisclosed amount after offering Liquid a loan of $120 million before the purchase.
The Liquid acquisition was made to support FTX’s most recent push into the Japanese market because the deal meant FTX got access to Liquid’s Type 1 Financial Instruments business license. Shortly afterward, the exchange rebranded Quoine Corporation, a Liquid subsidiary, as FTX Japan K.K to offer spot and derivatives trading to Japanese customers.
“The acquisition not only gives us a technological advantage but also allows us to work directly with Japanese regulators in a transparent, constructive and positive manner,” Bankman-Fried said at the time. “We look forward to further revolutionizing the Japanese digital asset ecosystem through FTX Japan.”
On Nov. 10, Japan’s Financial Services Agency issued an order to FTX Japan to cease business operations and to hold assets equivalent to its balance-sheet liabilities within the country. “It is necessary to take all possible measures to ensure that this does not lead to a situation where the company’s assets flow to foreign affiliates, etc. and the interests of creditors and investors are harmed,” the FSA wrote.
They also demanded FTX share a “business improvement plan” by Nov. 16, which outlines how FTX intends to protect users and their holdings. In light of FTX’s failure to provide even a basic plan as part of its own bankruptcy filing last week, tomorrow’s deadline is unlikely to be met.
Liquid’s claim that suspending withdrawals was a good-faith effort to comply with the U.S. bankruptcy filing was met with skepticism from the crypto community. “Ridiculous- Quione PTE Ltd is a Singapore company,” one commenter wrote. “What does that have to do with a US bankruptcy filing. Unless you guys gave the client funds to FTX or Alameda, you should let customers withdraw funds until things get sorted with the parent.”
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Read More:FTX-owned crypto exchange Liquid suspends all withdrawals
2022-11-15 16:02:00
