Tokyo FinTech
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Tokyo FinTech

Is Liquid out of control?

Liquid got hacked. Liquid is allegedly not paying its people. Yes, Liquid appears out of control. Now that it got acquired by FTX, it is someone else’s problem to straighten out the mess and do the right thing. Will Sam Bankman-Fried step up?

In a claim filed in the Singapore High Court, former Head of Product & Marketing Marisa McKnight seeks to recoup her vested equity. The circumstances surrounding her departure from the firm just after the exchange hack make for a captivating read and expose a toxic company culture.

Some “highlights”:

  • McKnight got fired for insubordination for not flying to Japan nine days after last working day at the company
  • Having been informed that she was under investigation in both Japan and the US, flying to Japan could have possibly exposed McKnight to the “Carlos Ghosn treatment”, so most people will understand that she did not take the trip
  • McKnight had to file an employment claim to Singapore’s Ministry of Manpower to get paid for her final month of salary and unconsumed leave
  • Extensive delaying tactics employed by Liquid in light of the announced acquisition by FTX in a transparent attempt to have the M&A deal close before any settlement

With the latest acquisition of Japanese crypto exchange bitflyer by ACA Group at a price of approximately USD 370m, one can estimate that Liquid’s transaction value as “damaged goods” will be somewhat lower, maybe around USD 150m to USD 250m.

Even taking into account the emergency loan extended from FTX to Liquid after the exchange hack, there would be enough funds available to pay these claims. That Liquid seems unwilling to make McKnight whole without being dragged into court leaves room for speculation that this is not an isolated case, and others might rise if the McKnight claim gets settled. People talk. Quo vadis, Liquid? Quo vadis, FTX?

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Norbert Gehrke

Passionate about strategy & innovation across Asia. At home in Japan. Connector of people & ideas.