Home » FTX to lend $120M to hacked Japanese exchange Liquid

FTX to lend $120M to hacked Japanese exchange Liquid

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Liquid exchange

FTX To Lend $120M To Hacked Japanese Exchange Liquid

Liquid, a Japanese crypto exchange, has been hit by a major security breach, losing an estimated $60 million worth of crypto to hackers. In response, FTX has stepped in to offer Liquid a total of $120M in loan financing as they attempt to deal with the aftermath of the attack.

Details of the Loan

The loan agreement that FTX has put in place with Liquid will be split into two components. The first of which is an immediate amount of $60M that has been provided to Liquid’s parent company already. The second element of the loan will happen six months after the initial agreement has been in action and it will provide liquidity for the Japanese exchange.

Liquid Needed Assistance

Liquid had announced back in October of 2020 that they had incurred “irregularities” in which funds were taken from the exchange. This has caused a worrying situation for the exchange, as the money has essentially been taken from customer’s wallets, with some of them being completely emptied. Liquid then reached out to FTX to help out and the loan agreement that was eventually reached with the crypto exchange has been seen as a much-needed lifeline.

Commitment To Transparency

As part of asserting the level of transparency that both parties have committed to, FTX has also said that they will provide Liquid with a detailed report on how the funds have been used over the course of the six-month period. This report will include all transaction details which will provide clarity regarding exactly where the funds have gone.

FTX Flexing Its Muscles?

With the news of this loan helping Liquid recover from a significant security breach, it’s also worth looking at this in the context of FTX’s standing in the crypto exchange industry. This loan indicates to the industry that FTX has the capacity to effectively provide support to an exchange in need and it may suggest that FTX is now looking to expand its influence and reach.

Conclusion

In conclusion, FTX has come to the rescue in the crypto exchange industry by providing $120M worth of loan financing to the hacked Japanese exchange Liquid. It’s a needed intervention for the exchange and it demonstrates FTX’s willingness and ability to help its fellow industry members out in their hour of need. It also serves to increase FTX’s standing in the industry, highlighting their commitment to transparency and their potential to generate more influence in the industry. On January 10th, crypto derivatives exchange FTX announced a loan of $120 million to the Japanese crypto exchange Liquid, which was recently hacked for more than $60 million.

Liquid, a Tokyo-based exchange, admitted earlier this month that it had been hacked and that $60 million worth of cryptos had been stolen. In order to repay users affected by the hack, Liquid appealed to the crypto industry for support.

FTX responded to the call by agreeing to lend Liquid $120 million to cover the losses. According to FTX, the loan will be used to cover customer losses and to ensure the platform’s long-term stability.

Under the terms of the loan, FTX will receive 8% interest on the debt over its two-year maturity period. The loan will also be secured by “substantial collateral” provided by Liquid.

The CEO of FTX, Sam Bankman-Fried, said that his exchange’s goal was to help Liquid get back on its feet and to continue providing a safe and secure trading platform for customers.

At the same time, Bankman-Fried acknowledged the risk of lending to a hacked exchange, noting that the loan will be subject to certain conditions – such as obtaining a full report from Liquid of the hack as well as liability waivers – to ensure that FTX’s interests are secure.

Overall, FTX’s loan of $120 million to Liquid provides a much-needed lifeline to the Japanese exchange, helping it to cover its losses and continue providing a secure platform for its customers. As the crypto industry continues to grow and become more popular, it is encouraging to see exchanges are willing to support one another in times of need.

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