The crypto industry is now facing the consequences of the bankruptcy of the crypto exchange FTX. Huobi’s subsidiary is the latest victim.
Citing “Failure to withdraw cryptocurrency assets from crypto exchange FTX”, Hong Kong-listed company New Huo Technology Limited (HKEX: 1611) announced Inside information Monday, that approximately $18.1 million in cryptocurrencies held by Hbit Limited are deposited into crypto exchange FTX according to the most recent announcement on Hong Kong Exchange.
Among 18.1 million capital, around $13.2 million is “client’s asset based on the client’s trading request and approximately USD4.9 million is asset of Hbit Limited”. The listed company warned that the crypto assets “may not be able to be withdrawn from FTX” due to the filing of bankruptcy protection declared by FTX on Nov 11, which is suffering from a liquidity crunch.
The board of directors stressed the need to continue providing clients with compliant, professional and secure virtual assets financial services.
“The Board is of the view that the Incident currently does not affect the normal business operations of the Group. As Hbit Limited is legally and operationally separated from other business entities of the Group, other assets and business lines of the Group will not be affected.”
The Board acknowledged its financial performance could be affected if “the incident is not solved.”
AAX, a Hong Kong-based crypto trading platform, is also experiencing recent turmoil. AAX said Sunday that the exchange continues the suspension of withdrawals for seven to ten days due to “a scheduled system upgrade” to protect users from the malicious attacks
Ben Caselin, AAX Vice President, tweeted in the early morning Monday, acknowledging this is “bad timing for a scheduled maintenance at @AAXExcahnge,” adding that the exchange “aimed to address serious vulnerabilities, to be prolonged for more than 24 hours. Out of extra precaution this will take longer,” urging the public to allow AAX to open up gradually.
AAX stressed that the exchange is not financially exposed to FTX and its affiliates. Its digital assets are also intact with a substantial amount of money stored in. Cold walletsAccording to the statement,
FTX filed for bankruptcy protection last Friday, after its exchange suffered a severe liquidity crunch. FTT, its native token, experienced a huge price drop. FTX was not able to rescue Binance, its main competitor. acquisition, The issue is beyond our control and we are unable to help.
Reportedly FTX was accused of unauthorizedly using its client’s capital to foster its sister trading Alameda Research. FTX was also hacked last Friday. It lost over $600 million in crypto funds. Sam Bankman-Fried, the founder and former CEO of the company, has resigned.