Bankrupt crypto lender Voyager Digital has rejected an offer from FTX that would have allowed Voyager’s customers to receive an advance on their claims in the bankruptcy. Attorneys for Voyager argue that the offer would only benefit FTX while harming Voyager customers.
FTX Offers To Support Voyager Customers In Bankruptcy
On Friday, crypto exchange FTX offered to provide early liquidity to Voyager Digital’s customers as it goes through the bankruptcy process. Voyager filed for Chapter 11 bankruptcy protection about two weeks ago. Alameda Ventures, which is controlled by FTX CEO Sam Bankman-Fried, had previously loaned Voyager $200 million in cash and USD Coin and 15,000 bitcoins.
Q2 2022 hedge fund letters, conferences and more
Under the terms of the new deal worked out between FTX and West Realm Shires, which owns FTX.US and Alameda Ventures, Alameda would allow Voyager's customers to create new accounts on FTX. When customers who accept the offer open their new FTX account, they will have a cash balance funded via an early distribution of part of their bankruptcy claims.
Additionally, FTX said it wouldn't buy Voyager's loans to bankrupt crypto hedge fund Three Arrows Capital. The crypto exchange expects any recoveries from those loans to be enough to fund supplemental distributions to Voyager's customers, whether or not they opened an FTX account.
Voyager Rejects FTX's Deal
However, Voyager Digital has officially rejected FTX's plan. In a court filing on Sunday cited by CoinDesk, Voyager's attorneys blasted FTX's offer, saying it "transfers significant value to AlamedaFTX. And completely eliminates the value of assets that are of no interest to AlamedaFTX."
Bankman-Fried had previously tweeted that their plan would enable Voyager's customers to access assets that would otherwise be tied up in the bankruptcy process for an extended period. He also clarified that the offer "would give Voyager customers back 100% of the remaining assets that Voyager has, including claims on anything recovered in the future."
However, Voyager's attorneys argue that AlamedaFTX's proposal was aimed at generating publicity for the company rather than value for Voyager's customers. They wrote that the offer "essentially proposes a liquidation where FTX serves the role of liquidator."
The lawyers added that the "fair value" of Voyager's digital assets and loans is "subject to negotiation with AlamedaFTX." According to Cointelegraph, they also said that while the deal is purported to make Voyager customers whole, it basically amounts to a liquidation of the crypto lender's assets in a way that "advantages AlamedaFTX."
Voyager's attorneys offered six ways FTX's proposal could harm Voyager customers, including capital gains taxes, unfairly capping the value of each user's account at its July 5 value, and eliminating the VGX token, which would "destroy in excess of $100 million in value immediately." They declared that AlamedaFTX's proposal "is a low-ball bid dressed up as a white knight rescue."
Updated on
