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 shoppers.
As part of his proposal, Bankman-Fried’s associates FTX and Alameda Ventures would enable clients the prospect to get liquidity for his or her Voyager accounts via new accounts at FTX.
“Underneath this transaction, Voyager’s clients would obtain not less than partial liquidity instantly, and the chance to withdraw that liquidity or freely reinvest it in their selection of digital assets,” wrote legal professionals for FTX and Alameda in a letter to Voyager’s advisers at Kirkland & Ellis and Moelis & Co.
Voyager mentioned in courtroom papers that it had $1.1bn in complete 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 instructed the federal bankruptcy court in New York that it will suggest a standalone reorganisation and a parallel course of to promote the corporate or its assets. On Friday, Voyager mentioned that almost 40 potential patrons 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 mentioned the acquisition of Voyager’s crypto assets and crypto asset loans, besides that of Three Arrows, could be acquired by Alameda “in instantly obtainable money at truthful market worth”. The second step of the transaction would enable Voyager account holders to get their portion of the money in an FTX account the place they may proceed to make investments in crypto.
“Prospects are beneath no obligation to join with FTX and doing so could be absolutely voluntary . . . Any buyer that doesn’t want to join with FTX would proceed to retain all of their rights and claims in the chapter proceedings, however wouldn’t obtain early entry to a distribution on their declare through FTX,” the letter mentioned.
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 grew to become distressed. As part of its acquisition proposal, Alameda mentioned it was prepared to write off that mortgage. It additionally owned almost a tenth of Voyager’s successfully nugatory inventory, which is listed in Toronto.
“Even these clients who want to be ‘lengthy’ cryptocurrency shouldn’t be compelled to accomplish that by holding unsecured claims in a bankrupt firm, not less than not when there is a chance to obtain money instantly,” mentioned the letter.
