FTX in joint offer to buy Voyager Digital’s assets

Sam Bankman-Fried’s cryptocurrency empire has made a suggestion 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 enable prospects the possibility to get liquidity for his or her Voyager accounts via new accounts at FTX.

“Underneath 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 alternative of digital belongings,” wrote legal professionals 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 complete mortgage obligations it was owed, together with $654mn from the hedge fund Three Arrows, which itself had gone bankrupt from crypto bets gone unhealthy, 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 legal professionals had informed the federal chapter court docket in New York that it could 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 carried out three days later.

Bankman-Fried, based on his lawyer’s letter, is looking for 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, can be acquired by Alameda “in instantly out there money at truthful market worth”. The second step of the transaction would enable Voyager account holders to get their portion of the money in an FTX account the place they may proceed to spend money on crypto.

“Clients are beneath no obligation to enroll with FTX and doing so can 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 12 months because it grew to become 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 compelled 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.