Sam Bankman-Fried’s cryptocurrency empire has made an offer to buy the digital assets of Voyager Digital which had filed for chapter earlier this month and frozen the accounts of consumers.
As part of his proposal, Bankman-Fried’s associates FTX and Alameda Ventures would permit prospects the prospect to get liquidity for his or her Voyager accounts by means of new accounts at FTX.
“Under this transaction, Voyager’s customers would receive at least partial liquidity immediately, and the opportunity to withdraw that liquidity or freely reinvest it in their choice of digital assets,” wrote legal professionals for FTX and Alameda in a letter to Voyager’s advisers at Kirkland & Ellis and Moelis & Co.
Voyager stated in court docket papers that it had $1.1bn in whole mortgage obligations it was owed, together with $654mn from the hedge fund Three Arrows, which itself had gone bankrupt from crypto bets gone unhealthy, together with these associated to the collapse of the Terra/Luna stablecoin. As Voyager more and more couldn’t meet buyer withdrawal calls for, on July 1 it froze all buying and selling and withdrawal exercise on its platform.
Voyager’s legal professionals had advised the federal chapter court docket in New York that it could suggest a standalone reorganisation and a parallel course of to promote the corporate or its assets. On Friday, Voyager stated that almost 40 potential consumers had executed confidentiality agreements to start due diligence. It has proposed a bid deadline of August 26 with an public sale for it performed three days later.
Bankman-Fried, in accordance to his lawyer’s letter, is searching for to pre-empt that course of by requesting an preliminary response from Voyager by Tuesday July 26 and signing a negotiated deal over the next weekend.
FTX and Alameda stated the acquisition of Voyager’s crypto assets and crypto asset loans, besides that of Three Arrows, could be acquired by Alameda “in immediately available cash at fair market value”. The second step of the transaction would permit Voyager account holders to get their portion of the money in an FTX account the place they may proceed to make investments in crypto.
“Customers are under no obligation to sign up with FTX and doing so would be fully voluntary . . . Any customer that does not wish to sign up with FTX would continue to retain all of their rights and claims in the bankruptcy proceedings, but would not receive early access to a distribution on their claim via FTX,” the letter stated.
Bankman-Fried, a 30-year-old multi-billionaire, is already an important participant at Voyager. Alameda has borrowed $377mn price of cryptocurrency from Voyager, its second-largest mortgage after the one prolonged to Three Arrows. Alameda had additionally lent $75mn to Voyager earlier this 12 months because it turned distressed. As part of its acquisition proposal, Alameda stated it was prepared to write off that mortgage. It additionally owned almost a tenth of Voyager’s successfully nugatory stock, which is listed in Toronto.
“Even those customers who wish to be ‘long’ cryptocurrency should not be forced to do so by holding unsecured claims in a bankrupt company, at least not when there is an opportunity to receive cash immediately,” stated the letter.