Hong Kong cryptocurrency trading firm files for provisional liquidation after FTX collapse

Hong Kong-run cryptocurrency trading firm Auros said it has entered into a liquidation process after struggling to pay creditors as fallout from the implosion of FTX last month continues to reverberate.

Auros was granted a “light touch” provisional liquidation application by the British Virgin Islands Court last month after it “found itself in a position where immediate liquidity was insufficient to satisfy recalls from lenders” following the FTX collapse, the company said in a statement published on Twitter on Wednesday.

The process allows a company to explore restructuring options that could help it return to solvency while remaining under the control of its directors. Auros said on Wednesday that it is expecting to resume normal operations if it successfully implements a restructuring.

Auros, founded in 2019, is an algorithmic trading and market making firm, and has been directly impacted by the bankruptcy of FTX, the company said in a statement published on Twitter earlier this month. It reportedly had roughly US$20 million worth of company funds held by FTX, which was the world’s second largest cryptocurrency exchange before it went bankrupt on November 11.

While Auros’ LinkedIn page shows that its executives are based in Hong Kong, and Google Maps lists the company as having an office address in the city’s Central district, Hong Kong is not Auros’ headquarters, a company spokeswoman told the South China Morning Post by email.

The company did not answer questions about where its headquarters is or the amount of capital it has frozen on FTX, referring the Post to its latest Twitter statement.

Several cryptocurrency firms with roots in Hong Kong, a city that recently pledged to boost its virtual asset industry with supportive policies, have run into trouble amid a prolonged crisis in the cryptocurrency industry that was set off in May this year by the collapse of multiple platforms.