Crypto Exchange FTX to buy bankruptcy voyagers

The crypto exchange FTX has acquired the bankrupt crypto lender Voyager for 1.42 billion dollars. The crypto exchange won an auction to buy Voyager’s assets against rival crypto investment firm Wave Financial. The move comes after Voyager rejected FTX’s rescue proposal earlier this year.

Voyager said in a press release late Monday night that FTX US’s bid is valued at approximately $1.42 billion and consists of the fair market value of all Voyager cryptocurrency at a future date to be determined, estimated at current market prices. to be $1.311 billion, plus additional consideration estimated to provide approximately $111 million in incremental value.

Voyager’s downfall

In July 2022, Voyager filed for Chapter 11 bankruptcy protection after the $2 trillion crypto market crash left it unable to honor withdrawals from its user base. Voyager’s crash was also partially caused by the collapse of the Three Arrows Capital (3AC). 3AC acted as a hedge fund that serviced loans from other institutions, including Voyager, to make risky bets on tokens. The portfolio included bets on the collapsed stablecoin TerraUSD and defaulted loans from Voyager worth $670 million.

Until its demise, Voyager had claimed that its investors’ funds were protected by the Federal Deposit Insurance Corp. (FDIC), but this turned out not to be the case. Voyager’s cash deposits are held with Metropolitan Commercial Bank, a New York-based lender, and FDIC insurance covers only the event of failure of the bank, not Voyager.

FTX to the rescue

FTX’s move to buy Voyager’s assets shows promising movement toward compensating users of Voyager, who have few legal options to secure the crypto they lost in the platform’s crash. Voyager has given a nod to a possible transition of its clients to FTX US, saying the exchange “will enable clients to trade and store cryptocurrency following the conclusion of the company’s Chapter 11 proceedings.”

Voyager’s users can look forward to October 19 when the purchase agreement will be presented to the US Bankruptcy Court for the Southern District of New York for approval. The sale of Voyager’s assets to FTX is subject to a vote by creditors, as well as “other customary closing conditions,” according to the press release.

The bottom line

Since the early 2022 crypto crash, FTX CEO Sam Bankman-Fried has bought a number of crypto firms that suffered devastating losses. For example, in July, FTX signed a deal that gave it an option to buy crypto lender BlockFi after giving it a $250 million credit line. The 30-year-old Bankman-Fried does not stop there. The crypto tycoon says he still has a lot of money to spend on further deals.