FTX-Owned Crypto Exchange Liquid Suspends Trading for Bankruptcy Proceedings – Here’s What Happened

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October 23, 2023 08:19 EDT

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Liquid Global, a Japan-based crypto exchange owned by now-bankrupt exchange FTX, has halted all trading after being “instructed” to do so by the law firm handling the bankruptcy.

“We have been instructed by [law firm Sullivan & Cromwell], who act for FTX Trading, to pause all forms of trading on our exchange because of the operation of the Chapter 11 process in the Delaware Courts,” a tweet from Liquid Global’s official Twitter account on Sunday said.

The company added that it will “assess the situation” and said it is “working through these issues.”

We have since done so while we assess the situation. We are working through these issues and will endeavor to give a fuller update in due course.

— Liquid Global Official (@Liquid_Global) November 20, 2022

At the time of writing, a similar notice could also be seen on the home page of the exchange’s website. The notice added that a fuller update will be given “in due course:”

The notice that trading has been halted came after the same exchange on November 15 said it had halted all customer withdrawals “in compliance with the requirements of voluntary Chapter 11 proceedings in the United States.”

Due to the Chapter 11 filing by FTX Trading International the ultimate beneficial owner of Quoine Pte. Ltd, Liquid Exchage (Quoine Pte.) is halting all withdrawals – both fiat and crypto currency.

More information will be provided as it becomes available

— Liquid Global Official (@Liquid_Global) November 15, 2022

Liquid hacked last year

In August last year, Liquid experienced a hack for around $86m, after which it received a $120 loan from FTX. FTX then went on to acquire Liquid in February this year for an undisclosed amount in a move that was seen as part of an FTX expansion into Japan.

“FTX is pleased to announce the acquisition of the Liquid group of companies, including an [Financial Services Agency]-registered cryptoasset exchange to provide products and services to our customers in Japan,” former FTX CEO Sam Bankman Fried tweeted at the time.

FTX declared bankruptcy on November 11, following a run on deposits and subsequent collapse of the exchange. At the same time, Sam Bankman-Fried resigned as CEO. Approximately 130 FTX-affiliated companies are part of the Chapter 11 bankruptcy, including FTX’s parent company and major crypto market maker Alameda Research.