Liquid exchange receives $120 million from FTX following hack

  • Liquid exchange and FTX are discussing potential collaboration for better service in the crypto industry
  • The recent funding is expected to strengthen Liquid’s capital position and balance sheet

Japanese cryptocurrency exchange Liquid Group Inc. has received $120 million in debt funding from FTX Trading following a hack on Thursday last week that resulted in the loss of almost $100 million. In a blog post dated August 26, Liquid announced that following the financing, the two exchanges have engaged in discussions about potential collaborative opportunities. They hope that with a combination of FTX’s financial aptitude and Liquid’s regulatory framework, they can experience mammoth growth and be better able to service the crypto industry.

Sam Bankman-Fried, the Founder and CEO of FTX Trading commented;

This opportunity with Liquid allows both organisations to strengthen and reinforce the belief that regulation in crypto and knowing your customer is an important part of the future of our industry. FTX’s culture of building desirable products with a sense of urgency combined will also add to the innovative opportunities that this collaboration offers,

The August 19 hack compromised the exchange’s warm wallets. Blockchain analytics company Elliptic estimates that a total of $97 million worth of varied digital assets including Bitcoin, Ether, XRP and stablecoins was stolen.
The hack is the second of its magnitude this month. The first happened on August 10 and resulted in a loss of more than $600 million on the Poly Network. As of Monday, $610 million had been recovered after the hacker gave back the stolen money.

In a tweet on Monday, Liquid assured clients that they would not suffer any losses because of the hack, maintaining that user balances would remain unaffected. They revealed that they were working at gradually restoring crypto deposits and withdrawals.

Liquid reveals that the funding will help strengthen its capital position. This will, in turn, accelerate capital generation plans and provide much-needed liquidity. It goes without saying that the funding will boost Liquid’s balance sheet and might serve its pending licensing applications in Singapore and Japan.

Commenting on the deal, Seth Melamed, COO of Liquid Group had this to say,

We are encouraged by the support of FTX & look forward to accelerating Liquid’s roadmap of initiatives to bring innovative products in the markets we serve in Japan and the world. We could not be more excited to explore opportunities to leverage FTX’s expertise in trading platforms with Liquid’s experience working within the regulatory frameworks in Singapore and Japan. By collaborating with FTX, we see enormous opportunities to drive innovation and change the future of finance with blockchain technology.

Liquid, a product of Quoine Corporation, was one of the first exchanges to receive a crypto-asset exchange operator license from Japan’s Payment Services Act. They allow users to buy, hold, and sell popular cryptocurrencies like Bitcoin, Ethereum and XRP. At the time of this writing, however, all crypto deposits to Liquid wallets remain suspended.

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Tukiya is an IT Student with a newly found interest in blockchain technology and its potential applications in everyday life.

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