Japanese cryptocurrency exchange, Liquid Group Inc. and Sam Bankman-Fried’s cryptocurrency exchange, FTX Trading Ltd, owner and operator of FTX.COM, announced on August 26, 2021 the closing deal of a $120 million debt financing, due to its expected $100 million hack last week.

By this financial merger, both of the crypto exchanges expected to attain exponential progress and accomplishment to best serve the crypto ecosystem, with the help of Liquid’s regulatory framework and FTX sophisticated financial expertise. Liquid have also entered good faith discussions with FTX in pursuit of further collaborative opportunities.

"We could not be more excited to explore opportunities to leverage FTX's expertise in trading platforms with Liquid's experience working within the regulatory frameworks in Singapore and Japan,” said the COO of Liquid Group, Seth Melamed in Thursday’s announcement. “By collaborating with FTX, we see enormous opportunities to drive innovation and change the future of finance with blockchain technology," he added further.

On the other hand FTX’s owner Bankman-Fried commented on FTX’s coming to Liquid’s rescue, “Helping the wider crypto community and a fellow team of like-minded builders was the key benefit for us,” he added, “We look forward to Liquid continuing to lead the way in crypto regulation and emerging from this stronger than before.” 

The exchange said that the financing will also improve its key regulatory metrics, “which further corroborates its ongoing licensing opportunities in the key jurisdictions of Japan and Singapore.”

Last week, Japan-based Liquid Global revealed the news of disastrous hack via Twitter that its hot digital wallets were compromised, resulting in a loss of at least $100 million in various cryptocurrencies, such as BTC, ETH, and XRP.

The hack brought in light the need for stronger security system in the cryptocurrency network, which regulators across the globe have pushed for recently. In its latest incident update, Liquid reassured its customers that they will not suffer any losses due to the hack. The exchange also asserts that consumers' personal data “was not compromised in any manner” during the hack.

Also Read | Japanese Crypto Exchange Liquid hacked with $97 million stolen

“Security and regulation have always been central to our operations as an exchange,” stated Bankman-Fried. “As regulators get more active and the space continues to grow, there are more opportunities to become licensed, and we fully expect the security of user funds to be a key consideration in order to secure those licenses.” 

Liquid Global, operated by Quoine Corporation, is looking forward to accelerate its roadmap not only in Japan but throughout the world in crypto market, of their initiatives to bring innovative products. It was the second major hacking incident in the crypto space this month, following on the heels of a record-breaking $610 million exploit of cross-chain protocol Poly Network on August 10.

The Poly Network’s hack was one of the more unusual in the history of digital assets, with the hacker named "Mr. White Hat", ultimately deciding to return the stolen money.

Joyashree Dey

CBW - External Analyst

INDIA