The Liquid exchange recently suffered a hack that cost it over $90 million. In response, FTX has provided a $120 million loan to the exchange to temporarily solve the most pressing problems. Liquid and FTX seem to publicly display a partnership that would go beyond a simple credit granted by a major player in the cryptosphere to another.
Liquid’s hack: FTX throws a lifeline
Liquid and FTX announce, in a blog post on August 26, 2021, “the closing of a USD 120,000,000 debt financing.” This amount is being loaned by FTX to Liquid, which suffered a hack on August 19, 2021, resulting in a loss of approximately $97 million in Bitcoin (BTC), Ether (ETH), Ripple (XRP), Tron (TRX) and other cryptocurrencies, according to Elliptic.
The stolen funds wouldn’t put Liquid in the red from a financial standpoint, however. The boost from FTX will, however, allow Liquid to temporarily cover the inconvenience caused by the hack. Liquid should thus be able to keep its recent reassuring promises to its customers that they will not suffer any losses due to the hack. The exchange had also stated that users’ personal data “has not been compromised in any way”.
Beyond the hack: an announced development
But the new money brought in by FTX also, according to Liquid, improves its regulatory parameters “which further corroborates its ongoing licensing opportunities in the key jurisdictions of Japan and Singapore.”
Liquid further noted in the release, a collaboration with FTX that goes far beyond just financial relief from the hack. Liquid’s COO, Seth Melamed, cites an opportunity through this partnership to provide innovative services:
“By collaborating with FTX, we see huge opportunities to drive innovation and change the future of finance with blockchain technology.”
Hacks come and go and don’t always look the same in DeFi. FTX is reaching out to Liquid to help it bounce back and continue its development projects. Not all DeFi projects are lucky enough to be hacked by Mr. White Hat, the Poly Network hacker who returned the funds he siphoned off.