FTX Contagion’s Next Victim: A Japanese Exchange

FTX loaned the exchange $120 million after its warm wallets were compromised last year

article-image

Blockworks exclusive art by axel rangel

share

FTX-owned Japanese exchange Liquid Global will halt all withdrawals including both fiat and cryptocurrencies.

Withdrawals were suspended so that the company could be in compliance with requirements of voluntary Chapter 11 proceedings in the United States, according to a tweet by the company. 

“This is not a security related halt,” the exchange tweeted. 

Adding, “Until further notice we would suggest to not deposit either FIAT or Crypto.”

Loading Tweet..

Liquid Global had been the victim of a $97 million hack in August 2021, where the exchange revealed that its “warm” wallets had been compromised. 

Soon after the hack, Liquid Global announced in a blog post that it had received a $120 million loan from FTX.

At the time, the exchange said it was “grateful for the vote of confidence from FTX and the valuable support of its users.”

“The financing will also improve Liquid’s balance sheet and, in turn, its key regulatory metrics, which further corroborates its ongoing licensing opportunities in the key jurisdictions of Japan and Singapore,” Liquid Global added.

FTX subsequently acquired the company and Liquid Global’s parent company, Quoine, in February 2022.
Quoine was one of the first exchanges to be granted a digital asset operating license under Japan’s Payment Services Act in 2017. It is in the process of acquiring similar approval from the Monetary Authority of Singapore, and FTX’s bankruptcy filing last week will likely affect its application.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

RTK networks are critical to enabling a world of ubiquitous autonomous drones, vehicles, and industrial robots. We believe the GEOD token enables both a cost and product advantage for the GEODNET RTK network, which will allow it to out-compete multi-billion dollar incumbents Trimble and Hexagon.

article-image

Senator Cynthia Lummis hopes a US strategic bitcoin reserve can be teed up for “adoption in 2025”

article-image

As EIP-4844 “blobs” transform the economics of Ethereum layer-2s, a growing debate pits long-term scalability against immediate ETH value

article-image

Prosecutors argued that FTX co-founder Gary Wang cooperated in their case against former FTX CEO Sam Bankman-Fried

article-image

The two largest crypto exchanges respectively run the second- and sixth-largest Solana validators

article-image

MicroStrategy’s bitcoin buying has exploded — it now holds 1.7% of the asset’s circulating supply

article-image

The MiCA era will reward the prepared and punish the rest