As the crypto winter continues to bite harder, Japanese crypto exchange Liquid Group acquired by the bankrupt FTX exchange has paused trading operations on its platform following an instruction from FTX bankruptcy representative S&C. The exchange announced the recent development in a tweet on November 20.
According to the tweet, a number of circumstances beyond its control necessitated the new development. The continued market fluctuations in addition to the operation of the Chapter 11 bankruptcy proceeding process in the Delaware Courts informed this decision.
While the market turbulence continues to force crypto firms into making difficult decisions, the firm says the temporal pause was necessary and updates will be made available as things progress.
Days before the announcement, FTX Liquid suspended its fiat and crypto withdrawals until further notice in compliance with the requirements of voluntary Chapter 11 proceedings in the United States.
However, in March, FTX made a strategic investment by acquiring Liquid Global for an undisclosed amount. In connection with the acquisition, FTX also entered into an agreement with Liquid to provide its existing Japanese users with services in compliance with Japanese laws.
Beyond Liquid Exchange: Crypto Firms Face FTX Bankruptcy Aftershock
Due to the collapse of FTX, a number of crypto firms associated with the exchange have suffered varying degrees of crisis due to their level of exposure.
Bankrupt crypto lender Voyager has had to reopen its bidding process after the initial bid was won by now-collapsed FTX. CrossTower, an Indian-based crypto exchange has leverage on the fallout of FTX to submit a proposal. Unfortunately many more crypto will suffer due to their exposure to FTX according to predictions from investments Multicoin Capital.
Furthermore, there seems to be no hope in sight for affected investors as insolvency lawyers have posited that it might take decades for investors to fully recover their assets. According to the lawyers, it will be an enormous exercise in the liquidation process to realize the crypto assets and then figure out a strategy with which the funds will be distributed.
The collapse of FTX has had various cascading effects on the broader crypto industry.