Voyager Digital Rebuffs ‘Low-Ball Bid’ From FTX, Alameda Ventures as Amid Bankruptcy Process

Bankrupt crypto lender Voyager Digital said a recent joint proposal from FTX and Alameda Ventures was a “low-ball bid dressed up as a white knight rescue” and alleged the plan would disrupt its bankruptcy process. Under the partial bailout plan announced on Friday, crypto trading firm Alameda would purchase all of Voyager’s digital assets and digital asset loans, except the loans to bankrupt crypto hedge fund Three Arrows Capital. Voyager’s customers could then receive some of those funds if they chose to open an account with crypto exchange FTX. Such customers could either withdraw the cash balance immediately or use it to make purchases on FTX’s platform.

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

“We submitted what we think is a generous proposal – we aren’t taking fees on this, just letting customers get their remaining assets back promptly,” Sam Bankman-Fried, the founder of FTX and Alameda, said in an emailed statement.

“It appears that Voyager’s consultants are attempting to stall out the process, increasing their fees,” Bankman-Fried added.

Voyager did not respond to a request seeking additional comment.

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

Earlier this month, the Federal Deposit Insurance Corporation said it was looking into Voyager Digital 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 learnt otherwise after Voyager filed for bankruptcy and a banking regulator began an enquiry, 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 casualties of a drastic fall in cryptocurrency prices.

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

At the time, Voyager had said it had more than $110 million (roughly Rs. 900 crore) of cash and owned crypto assets on hand, and that it intended to pay employees in the usual manner and continue their primary benefits and certain customer programmes without disruption.

© Thomson Reuters 2022