FTX in joint provide to purchase Voyager Digital’s belongings

Sam Bankman-Fried’s cryptocurrency empire has made a proposal to purchase the digital belongings 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 way of new accounts at FTX.

“Below this transaction, Voyager’s prospects would obtain a minimum of partial liquidity instantly, and the chance to withdraw that liquidity or freely reinvest it of their selection of digital belongings,” wrote attorneys 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 dangerous, 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 attorneys had instructed the federal chapter court docket in New York that it will suggest a standalone reorganisation and a parallel course of to promote the corporate or its belongings. On Friday, Voyager stated that just about 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 with his lawyer’s letter, is in search of 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 belongings and crypto asset loans, besides that of Three Arrows, could be acquired by Alameda “in instantly out there money at honest market worth”. 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 put money into crypto.

“Clients are underneath no obligation to enroll with FTX and doing so could be totally voluntary . . . Any buyer that doesn’t want to join with FTX would proceed to retain all of their rights and claims within the chapter proceedings, however wouldn’t obtain early entry to a distribution on their declare through 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 yr because it turned distressed. As part of its acquisition proposal, Alameda stated it was prepared to jot down off that mortgage. It additionally owned practically a tenth of Voyager’s successfully nugatory inventory, which is listed in Toronto.

“Even these prospects who want to be ‘lengthy’ cryptocurrency shouldn’t be pressured to take action by holding unsecured claims in a bankrupt firm, a minimum of not when there is a chance to obtain money instantly,” stated the letter.