The collapse of the bankruptcy of the FTX crypto exchange develops into the crypto industry. A subsidiary associated with Huobi was the latest casualty.
Citing “Failure to withdraw crypto assets from FTX crypto exchange,” Hong Kong-listed New Huo Technology Limited (HKEX: 1611) announced on Monday insider information that about $18.1 million worth of cryptocurrencies held by its subsidiary Hbit Limited , are listed on the crypto exchange. FTX, according to the latest announcement published on the Hong Kong Exchange.
Of the 18.1 million in capital, approximately $13.2 million are “client assets based on the client’s trade request, and approximately $4.9 million are assets of Hbit Limited.” The listed company warned that cryptoassets “may not be able to get out of FTX” due to the filing for bankruptcy protection announced by FTX on Nov. 11, which is suffering from a liquidity crunch.
The company’s board emphasized that it will continue to provide clients with appropriate, professional and secure financial services in the field of virtual assets:
“The Board believes that the Incident does not currently affect the Group’s normal operations. Since Hbit Limited is legally and operationally separate from the other business entities of the Group, this will not affect the other assets and activities of the Group.”
The board of directors acknowledged that its financial performance could suffer if “the incident is not resolved.”
Meanwhile, another crypto exchange in Hong Kong, AAX, is also suffering from the recent turmoil. AAX said on Sunday that the exchange is continuing to suspend withdrawals for seven to 10 days due to a “scheduled system update” to protect users from malicious attacks.
Ben Caselin, VP of AAX, tweeted early on Monday, acknowledging that this is “not a good time for scheduled maintenance at @AAXExcahnge”, adding that the exchange “aims to fix serious vulnerabilities that should be extended for more than 24 hours. Due to additional precautions, this will take longer,” urges the public to allow AAX to reopen gradually.
However, AAX stressed that the exchange has no financial risk to FTX or its affiliates and its digital assets remain intact with a significant amount held in cold walletsaccording to the statement.
FTX filed for bankruptcy protection last Friday after its exchange faced a critical liquidity crisis as its native FTT token experienced a sharp drop in price. FTX failed to get help from its main competitor Binance via acquisition, citing that “problems are beyond our control or ability to help.”
FTX was reportedly accused of misusing its client’s capital to develop sister trading Alameda Research. In addition, FTX also suffered a hack last Friday. Over $600 million has been withdrawn from his crypto wallets. Founder and former CEO Sam Bankman-Fried stepped down.
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