digital surge halted withdrawals

Troubling Radio Silence From Australian Crypto Exchange, Digital Surge

Disclaimer This article is for general information purposes only and isn’t intended to be financial product advice. You should always obtain your own independent advice before making any financial decisions. The Chainsaw and its contributors aren’t liable for any decisions based on this content.

On November 16, Brisbane-based cryptocurrency exchange Digital Surge announced that they would be suspending deposits and withdrawals after ominously declaring that they had “some limited exposure to FTX”. 

“Due to the impact of FTX Australia’s administration, we are not able to operate business as usual and have suspended all deposits and withdrawals until further notice,” they wrote in an gloomy email to customers.

The email explained that the exchange would provide further details on the situation within 14 days, however there has been a complete lack of any communication from the platform whatsoever. 

Screenshot of the email customers received from Digital Surge.

The Chainsaw reached out to Digital Surge on numerous occasions for further clarification on the crypto exchange’s exposure to FTX and when it plans to update its customers. To date, Digital Surge has not responded and is yet to issue any update on withdrawals moving forward. 

It’s now nearly a week on from the November 16 email announcement and Digital Surge have not provided a single public statement regarding the safety of customer funds that remain trapped on its platform. The official Digital Surge Twitter account has also not made a single post since November 10, marking nearly two weeks of near-total radio silence since the FTX saga. 

The fallout from FTX is only just starting to be realised by the broader market, with numerous major players including brokerages and exchanges releasing statements concerning the extent of their exposure to the now-defunct crypto exchange. 

Other exchanges that have had exposure to FTX, such as ByBit, have made announcements concerning the issue. On November 16, ByBit publicly released the addresses of its largest crypto wallets with in a press release addressing the matter.

However, ByBit Australia is yet to respond to The Chainsaw’s request to clarify its proof of reserves

At the end of the day, Digital Surge needs to do better by their customers who have been left in the dark for more than a week now. Dan Roberts, the Editor in Chief at Decrypt, said it best:

At a time when transparency is desperately needed, Digital Surge has unfortunately elected to keep their customers in the dark. For their customer’s sake, one hopes that the situation is not as dire as it looks, although current indications suggest that a positive outcome is unlikely…