FTX Contagion Spreads To Hong Kong Exchange, At Risk Of Capital Deficit

Hong Kong-based global exchange AAX AAB/USD halted user withdrawals on Tuesday, saying it was at risk of a capital deficit and needed more investments to resume normal operations. 

What Happened: AAX said that it suspended withdrawals in the wake of Sam Bankman-Fried's FTX FTT/USD saga.

“Some of our investors indicated their desire to withdraw their capital from AAX, putting us at risk of capital deficit,” the platform said in a blog post.

See Also: What are NFTs?

The exchange said that while it understands that this is a very difficult environment to raise new capital, the amount is not large by market standards. AAX did not disclose the exact amount it needs to raise to resume operations.

Last week, FTX experienced a liquidity crisis and declared bankruptcy, resulting in an industry-wide earthquake that affected several players in the crypto space.

In preparation for possible bankruptcy filings, crypto lender BlockFi acknowledged that it had a large amount of exposure to FTX.

Liquid Global, which was acquired by crypto exchange FTX earlier this year, also suspended withdrawals following FTX's bankruptcy filing.

Price Action: FTX is trading at $1.78, up 4.85% in the last 24 hours, according to Benzinga Pro data.

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