Featured image Pixabay, Chart: TradingView.com
Top exchanges in battle to buy Voyager Crypto Holdings
Over the winter, Voyager Digital folded due to outstanding liquidity issues. As a result, the firm filed for Chapter 11 bankruptcy in July to help it with its situation after halting withdrawals on the platform.
The crypto winter of 2022 was a drastic winter that dropped almost all the cryptocurrencies. Along with the collapse of the algorithmic Terra and its ecosystem, the industry was thrown into crisis.
Many crypto-related companies struggled to break even. However, not all of them could weather the storm and effects of the harsh bearish trend in the crypto space.
Then came the drowning of some crypto firms, such as high-interest lending platforms. Some of them halted withdrawals while they battled bankruptcy. The first firm to show signs of insolvency was Three Arrow Capital (3AC). Its failure to weather the impact of the bearish trend created a contagion for others.
Voyager Digital was launched in 2019 as a crypto lending platform. The operation goes beyond accepting customers’ deposits and paying interest on the deposited amounts. In addition, the company uses the deposited funds for lending to other users. At the time of the bankruptcy filing, Voyager had total liabilities of approximately $4.8 billion.
Voyager auctioned off its distressed assets
In a recent development, a report from the Wall Street Journal revealed that Binance and FTX are fighting to acquire Voyager’s assets. Unfortunately, the two major crypto exchanges have asked for help. Following its emergency, Voyager auctioned its holdings to the public on September 13 this year. This action has seen some bidders indicate their interest in the assets.
According to the source, Binance has outbid FTX by an additional $50 million. FTX has been involved in a buying spree since last year as it looks for possible good assets. However, the moves have left the firm concerned about the recurring bearish trend in the crypto market.
The bidding for Voyager’s assets saw Binance and FTX take the lead. But there are other participants such as CrossTower, a trading platform, and Wave Financial, a crypto investment manager. The announcement of the winning bid is expected on September 29, but it may come sooner than expected.
Voyager’s liquidity problems stemmed from ties with 3AC
Voyager digital was hit by the problem of insolvency which led to the company filing for bankruptcy. This was mainly related to its over $650 million financial ties with Three Arrows Capital, a hedge fund platform.
At the time of the bankruptcy, Voyager lent about $377 million to Alameda Research, a crypto trading firm. Alameda Research is also blamed by FTX CEO Sam Bankman-Fried. Alameda Research acquired part of Voyager during the filing, which is a 9.5% stake.
