Liquid to Cover Hack Losses With $120M Loan From FTX
FTX has come to Liquid's rescue with a $120 million loan.
- Liquid Global has raised $120 million in debt financing from FTX.
- The funding comes a week after Liquid suffered a major crypto hack, resulting in $97 million in losses.
- Sam Bankman-Fried said FTX was “proud to announce” its capital extension to Liquid.
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Liquid has closed a $120 million debt financing round from FTX.
Liquid Receives FTX Bailout
Japanese crypto exchange Liquid Global has raised $120 million in debt financing from fellow exchange FTX, the exchange announced Thursday. The exchange did not reveal specifics of the loan agreement.
The funding comes a week after Liquid suffered a major crypto hack. The loan will help cover Liquid’s recent losses, compensate users, and supply new capital for the exchange’s operations.
On Aug. 19, an unknown hacker drained the exchange’s wallet of over $97 million in various assets, including BTC, ETH, XRP, and TRX.
Yesterday, Liquid stated it would compensate the hack victims, and reassured that there would be “no impact on user balances.”
All crypto deposits are currently suspended, and the trading platform has warned users to not transfer crypto to their wallet address until further notice.
In addition to the debt financing, the exchange revealed that it is pursuing “collaborative opportunities” with FTX.
Speaking on the news, Liquid Group COO Seth Melamed said:
“By collaborating with FTX, we see enormous opportunities to drive innovation and change the future of finance with blockchain technology.”
Sam Bankman-Fried, the CEO of FTX, said in a tweet that FTX was “proud to announce” its capital extension to Liquid. He wrote:
“We’ve admired what Liquid has been working towards: a leader in international cryptocurrency compliance, and one of the longest running exchanges in the ecosystem.
Liquid’s subsidiary, Quoine, was the one of the first exchanges to receive a license and operate in Japan under its Payment Services Act. Despite being a fully regulated exchange, the trading platform fell victim to two security attacks. Before last week’s hack, the exchange suffered an attack in November 2020.
The team did not specify their plans to improve the security infrastructure despite being hacked twice in the last one year.