FTX has proposed that Voyager customers open accounts into which the proceeds from their claims in the crypto broker’s bankruptcy would be deposited. With consent and court approval, they would gain access to the assets sooner than under the standard liquidation process.
happy to do what we can to get liquidity to Voyager’s customers: https://t.co/zDtGMfGq64 https://t.co/MdoIfU229B
— SBF (@SBF_FTX) July 22, 2022
The initiative was developed by the exchange’s operators and its U.S. subsidiary FTX Trading and West Realm Shires. Alameda Ventures — another entity linked to Sam Bankman-Fried — also participated.
In June, the latter provided Voyager Digital with a loan of 200 million USDC and a revolving credit line of 15,000 BTC (~$300 million).
Alameda Research was the second-largest borrower by the amount of funds raised from Voyager Digital after Three Arrows Capital (3AC). The outstanding balance includes an unsecured loan of $75 million — the largest on the list.
Clients agreeing to the proposal would be able to withdraw cash immediately or use the funds to purchase digital assets on FTX. It is voluntary and would presumably run until early August, according to the press release.
“We want … to find the best way to restore the insolvent crypto business … that will allow clients to obtain early liquidity and recover part of their assets, without forcing them to speculate on the outcome of the bankruptcy and to take on unilateral risks,” Bankman-Fried said.
Under the plan there is no provision for FTX to buy back the loans, provided by Voyager to the liquidated hedge fund 3AC, or for involvement in related lawsuits. The exchange’s leadership expects that funds will be returned to the crypto broker’s clients regardless of their decision.
Voyager’s lawyers called the FTX proposal “misleading or containing outright false statements.” They explained that the plan would benefit “AlamedaFTX” at the expense of the clients and would “completely wipe out the value of assets that are of no interest to them”.
“AlamedaFTX offers a liquidation in which FTX acts as the liquidator. The ‘fair value’ of Voyager’s cryptocurrency assets and loans is to be discussed with AlamedaFTX. This is a bad deal [for the crypto broker’s clients] … under the guise of a ‘white knight’,” the lawyers clarified.
Bankman-Fried said the proposal would give Voyager’s clients the opportunity to access assets that would otherwise be frozen during the legal proceedings.
“To be precise: our proposal will return to Voyager’s clients 100% of the remaining assets, including claims on anything that will be returned in the future,” he explained.
14 p.s. to clarify: our offer would give Voyager customers back 100% of the remaining assets that Voyager has, including claims on anything recovered in the future.
— SBF (@SBF_FTX) July 25, 2022
On July 5, Voyager Digital filed for bankruptcy in a New York court. The company’s liabilities are estimated at between $1 billion and $10 billion, with around 100,000 customers.
Earlier, the CEO of FTX promised to spend billions on buying stakes in other companies.
Read more about Bankman-Fried in our educational cards.
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