Voyager Digital Rejects FTX’s ‘Low-Ball Bid’, Alameda Ventures Amid Bankruptcy Process

Bankrupt cryptocurrency lender Voyager Digital said a recent joint proposal by FTX and Alameda Ventures was a “low-ball bid dressed as a white knight rescue” and claimed the plan would disrupt the bankruptcy process. Under the partial bailout announced Friday, crypto trading firm Alameda would buy all of Voyager’s digital assets and digital asset loans, except for the loans to bankrupt crypto hedge fund Three Arrows Capital. Voyager’s customers can then receive a portion of that money if they choose to open an account with crypto exchange FTX. Such customers can withdraw the cash balance immediately or use it to make purchases on FTX’s platform.

Voyager said in a July 24 court filing that the proposal was “intended to generate publicity for itself rather than value for Voyager’s customers.”

“We believe we have made a generous proposal — we’re not charging fees for this, we’re just letting customers get their remaining assets back quickly,” Sam Bankman-Fried, the founder of FTX and Alameda, said in an emailed statement.

“It appears that Voyager’s consultants are trying to slow down the process and increase their fees,” Bankman-Fried added.

Voyager did not respond to a request for additional comment.

The company filed for Chapter 11 bankruptcy earlier this month. In June, it had signed an agreement with Alameda for a revolving credit line.

Earlier this month, the Federal Deposit Insurance Corporation said it was investigating Voyager Digital’s marketing of deposit accounts for cryptocurrency purchases, according to an FDIC official, confirming a report in the Wall Street Journal.

Customers who assumed their deposits were insured by the FDIC found out otherwise after Voyager filed for bankruptcy and a banking regulator launched an investigation, the report said. The FDIC official did not comment on details of the probe.

The battered crypto brokerage and lender filed for bankruptcy last week, becoming one of the latest victims of a drastic drop in cryptocurrency prices.

Crypto lenders boomed during the pandemic, but have recently run into difficulties following the demise of a major token in May and global risk-off sentiment.

At the time, Voyager had said it held more than $110 million (approximately Rs. 900 crore) in cash and crypto assets, and that it planned to pay employees in the usual way and continue their primary benefits and certain customer programs. set without disruption.

© Thomson Reuters 2022


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