FTX-Owned Crypto Exchange Liquid Pauses All Trading

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Key Takeaways

  •  Liquid stated that they had been instructed by the S&C, who act for FTX Trading, to pause all trading due to the Chapter 11 bankruptcy proceedings
  • FTX acquired Liquid Global in February this year

Liquid, a crypto exchange brought by defunct FTX earlier this year, has paused all trading. This comes days after the firm halted all withdrawals following FTX’s filing for Chapter 11 bankruptcy in the US.

In a November 20 tweet, Liquid stated that they had been instructed by the S&C, who act for FTX Trading, to pause all kinds of trading owing to the operation of the Chapter 11 process in the Delaware Courts.

“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,” the tweet reads.

Liquid Global’s parent company, Quoine, is one of the entities named in FTX’s bankruptcy filing last week. In February 2022, FTX acquired the Japanese crypto exchange Liquid Group to serve Japanese customers through its new subsidiary. FTX’s association with Liquid Global goes long back to 2021 when it provided the Japanese exchange with a $120 million loan in the wake of a $90 million hack.

Like FTX, several FTX subsidiaries have been deeply affected by the sudden collapse and the ongoing bankruptcy proceedings of Sam Bankman Fried’s FTX. LedgerX, a U.S.-based subsidiary of FTX, has been working towards completely dissociating itself from FTX. As per the strategic review of FTX’s global assets, LedgerX was removed as a debtor in FTX’s bankruptcy filing.

According to a review conducted by the financial services firm Perella Weinberg, most regulated/licensed subsidiaries of FTX have responsible management, solvent balance sheets, and valuable franchises.

Perella Weinberg also found that some of FTX’s subsidiaries, including FTX EU, FTX Japan, Quoine, FTX Turkey Teknoloji Ve Ticaret, FTX Exchange FZE, and Zubr Exchange, were in debt.

On November 11, FTX and around 130 companies in FTX Group — including FTX US, under West Realm Shires Services, as well as Alameda Research started proceedings to file for bankruptcy in the US. The bankrupt crypto trading platform is yet to detail a potential recovery plan for FTX investors. The collapse of a crypto behemoth like FTX is the latest in a string of bankruptcy filings in 2022, from Celsius to Voyager Digital.

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Saniya Raahath
Saniya Raahath

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