FTX Submits Joint Offer to Purchase Voyager Digital’s Assets

Sam Bankman-Fried's cryptocurrency empire has made an offer to buy the digital assets of Voyager Digital, which filed for bankruptcy earlier this month and froze customers' accounts.

As part of its proposal, Bankman-Fried's subsidiaries FTX and Alameda Ventures would allow customers to obtain liquidity for their Voyager accounts through new accounts at FTX.

“As part of this transaction, Voyager’s customers would immediately receive at least partial liquidity and the ability to withdraw or freely reinvest that liquidity in digital assets of their choice,” FTX and Alameda’s lawyers wrote in a letter to Voyager’s advisers at Kirkland & Ellis and Moelis & Co.

Voyager said in court filings that it had loan obligations totaling $1.1 billion, including $654 million from hedge fund Three Arrows, which itself went bankrupt due to failed crypto bets, including those related to the collapse of the Terra/Luna stablecoin. As Voyager became increasingly unable to meet customers' withdrawal requests, it froze all trading and withdrawal activity on its platform on July 1.

Voyager's lawyers had told the federal bankruptcy court in New York that it would propose a standalone reorganization and a parallel process to sell the company or its assets. On Friday, Voyager said nearly 40 potential buyers had signed confidentiality agreements to begin due diligence. It has proposed a bidding deadline of August 26, with an auction to be held three days later.

According to his attorney's letter, Bankman-Fried is attempting to forestall that process by requesting an initial response from Voyager by Tuesday, July 26, and signing a negotiated deal the following weekend.

FTX and Alameda said the acquisition of Voyager's crypto assets and crypto asset loans, excluding those of Three Arrows, would be acquired by Alameda "in immediately available cash at fair market value." The second step of the transaction would allow Voyager account holders to get their portion of the funds into an FTX account where they could continue investing in crypto.

"Customers are not required to register with FTX and this would be entirely voluntary. . . Any customer who does not wish to register with FTX would continue to retain all of their rights and claims in the bankruptcy proceedings, but would not receive early access to a distribution of their claim through FTX," the letter said.

Bankman-Fried, a 30-year-old multi-billionaire, is already a major player at Voyager. Alameda has borrowed $377 million worth of cryptocurrency from Voyager, its second-largest loan after that to Three Arrows. Alameda also loaned Voyager $75 million earlier this year when it was in distress. As part of its takeover proposal, Alameda said it would be willing to write off that loan. It also owned nearly a tenth of Voyager's virtually worthless shares, which are listed in Toronto.

“Even those customers who desire to ‘long’ cryptocurrency should not be forced to do so by holding unsecured debts in an insolvent company, at least not if there is an opportunity to receive cash immediately,” the letter said.