Amidst the crisis ravaging FTX, popular crypto exchange, Liquid Global has suspended both fiat and crypto withdrawals on its network. The exchange announced the halting of the services in its Tuesday Twitter post. According to Liquid Global, it took the decision in compliance with regulations relating to FTX’s filing for Chapter 11 bankruptcy protection.
Liquid Global said, “Fiat and crypto withdrawals have been suspended on Liquid Global in compliance with the requirements of voluntary Chapter 11 proceedings in the United States. Until further notice, we would suggest to not deposit either fiat or crypto.”
Meanwhile, Liquid Global insisted that its resolve to suspend withdrawals is not “a security related halt.” It, however promised to provide more information for its users at a later date.
Acquisition of Liquid Global by FTX
Recall that FTX had in May acquired Liquid Global and all of its operating subsidiaries. Then, the exchange failed to disclose the purchase price. However, FTX reportedly offered Liquid a $120 million loan beforehand.
Notably, FTX purchased Liquid as its Japan subsidiary. Recently, Japan’s Financial Services Agency ordered FTX Japan to cease business operations. The agency also ordered the exchange to hold assets in the country equivalent to its balance-sheet liabilities until Dec. 9.
Worthy of note that Liquid Global is halting withdrawals on its network a few days after claiming that customer assets on its wallets were not impacted by the FTX exposure. Recall that the crisis rocking FTX has continued to inflict negative impacts on the sphere. The issue started after a leaked balanced sheet reportedly showed that Alameda Research, a company founded by Sam Bankman-Fried, tied up billions of dollars of its assets in FTT.
Recall that Sam-Bankman Fried owned both FTX and Alameda. This development made Binance, a leading crypto exchange to commence the liquidation of its FTT holdings, thereby triggering massive withdrawals of assets from the exchange. Also, this plunged the FTT token to around a 75% low. In a late attempt to redress the situation, Zhao made an attempt to purchase the assets of FTX. In the end, the deal failed to materialize, with CZ citing “due diligence.”
After plunging into liquidity, FTX decided to file for Chapter 11 bankruptcy. Bankman-Fried also resigned from the company, with John J. Ray III appointed as its new chief executive. However, Bankman-Fried intends to still maintain his position with FTX while it works through the bankruptcy process.