Digital Surge attempts to refloat business

Digital Surge clients and unsecured trade creditors will receive 55 cents for every dollar claim made on December 8.

Exchanges & Wallets January 25
Kimberly Rodriguez Medina

Digital Surge has 30,000 Australian clients on its record book to whom it has offered over 300 cryptocurrencies through its technological platform, although deposits and withdrawals were halted from December 7, 2022, to protect the interests of clients and creditors. Now, despite the difficulties faced by the cryptocurrency sector, Digital Surge has reached an agreement with its creditors. 

An unprecedented agreement 

A creditor vote approves a company arrangement agreement (DOCA) that will allow Digital Surge to continue operating and settle the claims of its creditors. The DOCA proposed by the founders, who also put up $1 million of their own money, was recommended by trustees John Mouawad, David Johnstone and Scott Langdon of KordaMentha Restructuring.

 "A distribution of the balance of customer claims will be paid on a pari passu (every creditor on an equal footing) basis over the next five years out of the quarterly net profits of Digital Surge", Digital Surge co-founder, Daniel Rutter.

Trustee David Johnstone said the DOCA was in the best interest of creditors and provided superior returns and more certainty, compared to Digital Surge being liquidated immediately. In a statement, KordaMentha said that customers and unsecured trade creditors would be able to access the amount to be paid on the platform in the coming weeks. 

Coming Soon: Payments to Unsecured Creditors

In addition, a creditors' trust will be created to facilitate the distribution of these payments to unsecured creditors. Payments will be made in fiat currency only and administrators will be appointed guardians of the creditor trust to oversee the orderly distribution of trust funds to creditor beneficiaries. Clients and creditors will receive 55% of what they claimed on December 8 and will be able to access those funds in the coming weeks. The agreement also includes the creation of a creditors' trust to facilitate the distribution of payments to unsecured creditors and ensure an orderly distribution of funds. 

Despite the challenges, Digital Surge remains committed to the well-being of its clients and has taken steps to protect their interests.

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