AAX, a global Bitcoin exchange based in Hong Kong, stated that they are at risk of capital shortfall. He said they want to collect more investment to continue their normal operations. Here are the details…
FTX meltdown affects Bitcoin exchange
As we reported as Kriptokoin.com, AAX stopped user withdrawals on Monday. Now, the stock market has stated that there is a capital shortage, so they are looking for capital. “Currently, it is clearly a very difficult environment to raise new capital,” AAX said in its official statement. But the amount is not large by market standards,” he said. However, AAX has not disclosed the exact amount it must collect to continue operations as usual.
The trading platform noted that its current shareholders raised additional capital last week. He added that he was earning interest on new investments, adding that he was “in a good position” to continue his normal activities. FTX.com, once the world’s second largest crypto exchange, has struggled with a liquidity crisis. It finally filed for bankruptcy last week. Thus, it sent an industry-wide shockwave affecting multiple players in the crypto space.
Investors’ desire to withdraw money caused risk of capital shortfall
In AAX’s statement, it was stated that after the meltdown of FTX and the announcement of the suspension of withdrawals in AAX, some AAX investors are trying to withdraw their capital from the stock market, which increases the risk of capital shortfall in AAX. AAX has not given a specific timeline for when it will restart its withdrawal services. It’s between 7 and 10 days, he said in Monday’s initial suspension announcement.
Ben Caselin, AAX vice president and head of AAX Trends, said before the final announcement, what had been witnessed on AAX and other exchanges was “a great fear” caused by the collapse of FTX. The trading platform, which had nearly $4 billion in 24-hour trading volume a week ago, said on Monday that it was suspending withdrawals after its technical team found anomalies in the system that threatened sensitive data.
2,000 people requested withdrawals
AAX on Sunday cited turbulent markets as a reason for the outage. But the crypto exchange denied exposure to FTX. Caselin and AAX’s final disclosure ensured that user funds in AAX are safe and not compromised. Caselin also said that none of AAX’s directors have withdrawn their funds from AAX, despite the current situation affecting them as well. “We don’t intend to run away with the funds, that’s for sure. “There are no guarantees just to initiate withdrawals,” he said.
AAX added that it will undertake to ensure the distribution of client assets through legal procedures should the exchange fail to raise the necessary capital to revive the services. In a statement earlier on Tuesday, AAX stated that among 2,000 users had requested withdrawals using a system that was put in place. But he added that manual procedures mean deposits will take longer.
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