Liquid Global, the Japanese crypto exchange owned by FTX, suspended all withdrawals from its platform early Tuesday morning as FTX filed for bankruptcy in the US. The company tweeted on Nov. 15 that customers would not be able to withdraw either fiat or cryptocurrencies on the Liquid Global platform, citing the ongoing crisis of centralized crypto exchanges. The company tweeted:
“Fiat and crypto withdrawals have been suspended on Liquid Global in compliance with the requirements of voluntary Chapter 11 proceedings in the United States. Until further notice, we would suggest to not deposit either fiat or crypto.”
The exchange emphasized that the latest measures are not a security-related shutdown and will provide further updates when available. Liquid is the latest crypto company to explode following the shocking collapse of FTX and Alameda Research last week.
FTX loaned Liquid $120 million after the $90 million hack in 2021 and later bought the exchange for an undisclosed amount in February with the aim of working with it to provide crypto products to Japanese users. The Liquid is run by Quoine, named in FTX’s bankruptcy filing last week.
Japan’s Financial Services Agency on November 10 ordered FTX Japan to suspend business operations and hold assets equal to its balance sheet liabilities within the country. The FSA wrote:
“It is necessary to take all possible measures to ensure that this does not lead to a situation where the company’s assets flow to foreign affiliates, etc. and the interests of creditors and investors are harmed”.
After the FSA action, the November 12 announcement was Liquid’s first appearance on Twitter since late August 2022. The exchange said we did not find any unusual activity after the initial checks. However, Liquid quickly declared that it is suspending cryptocurrency withdrawals from Liquid Global “until additional security checks are completed” as a “precautionary measure.”
Liquid’s QASH token fell by more than 25% after the exchange stopped withdrawals.
Liquid’s claim that the ban on withdrawals was a genuine step towards achieving US bankruptcy was met with criticism from the crypto community.