The Bahamas-based subsidiary of FTX Digital Markets, FTX Digital Markets Ltd., was frozen by local securities regulators on Nov. 10 and liquidators were appointed to safeguard its funds while bankruptcy proceedings were initiated.
FTX’S collapse continues to reverberate throughout the crypto industry, affecting several crypto-related companies in excess of 100,000 USD.
On Nov. 11 to 14 three crypto companies announced large losses, one of which had to lay off workers to deal with the crisis.
On Nov. 12, the Financial Times reported that $50 million worth of Galois Capital’s assets were stuck on cryptocurrency exchange FTX. According to the report, the funds were “stuck” on FTX because Galois declined to withdraw its funds to other exchanges.
Other crypto-focused companies have reported that their funds are stuck on the now-bankrupt exchange.
$18 million worth of cryptocurrency was unable to be withdrawn from the Hong Kong-based crypto platform Hbit Limited before FTX stopped processing withdrawals on Nov. 14, according to New Huo Technology, the owner of the platform.
Hbit users lost $13.2 million worth of digital assets when Quoine shut down, the company said that it would continue to take steps to “withdraw the cryptocurrency as soon as possible,” bit said due to FTX’s bankruptcy filings that the crypto “may not be able to be withdrawn from FTX.”
The $14 million in funding comes from Li Lin, the founder of Huobi crypto exchange, according to the announcement. However, the FTX company doesn’t yet know what the financial impact of its bankruptcy will be if it is unable to withdraw the funds.
On Nov. 14, Nigerian Web3 startup Nestcoin posted to Twitter a letter previously shared with investors, announcing that FTX had denied its withdrawal request.
The letter stated that Nestcoin would lay off workers “as we held our assets (cash and stablecoins) at FTX to manage our operational expenses” and that it no longer had the funds to pay some staff.
On Nov. 13, CoinGecko, a crypto data aggregator platform, warned that layoffs across the sector could rise in the coming months as the “full impact” of FTX’s sudden collapse takes effect.
FTX Group, 130 firms in the FTX Group, including FTX.US and Alameda Research, intend to file for bankruptcy in the United States on November 11 after FTX ran into a liquidity crisis and could not process customer withdrawals, leaving customers without access to their funds.
The local securities regulator froze its Bahamas-based subsidiary, FTX Digital Markets’s assets on Nov. 10 and appointed liquidators to safeguard its funds while bankruptcy proceedings are undertaken.