The creditors of Brisbane-based cryptocurrency exchange Digital Surge have voted to pass the proposed Deed of Company Arrangement (DOCA), less than two months after the company entered into voluntary administration.
Digital Surge went into administration in December 2022, following the collapse of FTX. It was announced that the company transferred $33 million worth of assets into FTX just two weeks earlier.
The directors of Digital Surge immediately declared an intention to propose a DOCA to pay back all creditors over time, with payments coming from the future profits of the company, the directors also proposed contributing AUD$1.25 million of their own funds.
KordaMentha, the administrators of Digital Surge, presented the package to creditors of Digital Surge to be voted on at the Second Meeting of Creditors on 24 January. That meeting took 4 hours, with the DOCA passed overwhelmingly.
Successful rescues in insolvency are rare, with over 90% of administrations leading to liquidations, and this appears to be the first time that a digital currency exchange has achieved a successful rescue package in an insolvency event.