Crypto Exchange TrigonX to relaunch after FTX-induced collapse

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Key Takeaways

  • The firm collapsed in December with its debts exceeding $50 million.
  •  The company director states that “better, more certain, and expedient dividend” for the creditors would be a preferable option than liquidation. 

TrigonX, an Australian cryptocurrency exchange that faced a collapse in December 2022 with debts exceeding $50 million, is on the path to a revival after receiving approval from creditors for a deed of company arrangement. Matteo Salerno, the company director, expressed that relaunching the exchange under this arrangement would result in a more favorable outcome for creditors compared to liquidation.

The downfall of FTX in November 2022 had a ripple effect on several digital asset exchanges, including TrigonX, which struggled to meet withdrawal demands and subsequently appointed administrators on December 16, 2022. A report by legal firm Kroll revealed that TrigonX’s failure was influenced by multiple factors, including the collapse of FTX and legal action taken by customers seeking the return of their funds.

Salerno clarified that certain payments made to himself and his wife, which were examined in the Kroll report, were intended to update employee entitlements in anticipation of the company’s pending sale. The goal of the receivership was to achieve a swift outcome that benefits the creditors, as liquidation would have tied up funds for an extended period, resulting in a significant depletion of available distributions.

TrigonX, which initially launched in 2014, is now the latest success story to emerge from the aftermath of the FTX collapse. The exchange is set to make a comeback after securing approval for a deed of company arrangement from its creditors, as reported by The Australian on May 29.

Salerno expressed that a return to a “better, more certain, and expedient dividend” for the creditors would be a preferable scenario compared to liquidation. He emphasized that the receivership was intended to achieve a prompt and optimal outcome for the creditors.

“A liquidation would have been likely to tie up funds held in the administrator’s control for many years. This would have resulted in the substantial depletion of funds available to be distributed for the benefit of creditors.”

Among the creditors of TrigonX is Sydney-based investor King River Capital, which is seeking to recover $9 million that was not authorized for trading with FTX at the time. The case of TrigonX follows the near-collapse of another Australian crypto exchange, Digital Surge, which narrowly avoided financial ruin in the aftermath of the FTX meltdown. In January, Digital Surge creditors approved a five-year bailout plan, enabling the exchange to continue its operations.

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Saniya Raahath
Saniya Raahath

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