Crypto Lender Voyager Sends $1.42B FTX Sale to Creditor Vote

(Reuters) – Bankrupt crypto lender Voyager Digital on Wednesday received the first court approval for a $1.42 billion sale of its assets to swap platform FTX, allowing Voyager to seek creditor votes on the proposal.

U.S. Bankruptcy Judge Michael Wiles in Manhattan said during a court hearing that he would approve Voyager’s sales contract and creditor solicitation materials, once Voyager makes certain changes that make clear the company remains open to higher and better offers than the FTX bid.

Wiles said the sale would not be final until it is approved by creditors as part of a Chapter 11 bankruptcy plan.

“If the plan falls apart, no part of this agreement will survive,” Wiles said.

FTX made the winning bid after a two-week auction in September. The sale, if approved by creditors, would move most Voyager customers to accounts on FTX’s platform. They would recover 72% of the cryptocurrency assets they held with Voyager prior to the bankruptcy filing, even though the value of those cryptocurrency assets may have diminished in the time since Voyager filed for Chapter 11.

Voyager account holders are the primary creditors in the bankruptcy, with claims worth $1.76 billion, according to court documents.

Creditor votes are due by November 29, and Voyager intends to seek final approval of the sale at a confirmation hearing in December.

Voyager filed for bankruptcy protection in July, citing volatility in cryptocurrency markets and default on a large loan given to crypto hedge fund Three Arrows Capital (3AC). Voyager is still seeking repayment from 3AC, which is also bankrupt, and that effort could potentially bring in additional funds for Voyager’s customers, according to court documents.

Voyager had lost significant value during an industry-wide cryptocurrency downturn caused by the May 2022 collapse of the Terra Luna stablecoin, stopping customers from withdrawing their crypto assets shortly before the bankruptcy filing.

In re: Voyager Digital Holdings Inc., US Bankruptcy Court for the Southern District of New York, No. 22-10943.

For Voyager: Joshua Sussberg, Christopher Marcus and Christine Okike of Kirkland & Ellis

For the Official Committee of Unsecured Creditors: Darren Azman of McDermott Will & Emery

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