Sam Bankman-Fried-led FTX has won the protracted bidding war for bankrupt crypto lender Voyager Digital’s assets.
According to a press release by Voyager, the FTX bid is valued at $1.4 billion. FTX was bidding against digital asset investment firm Wave Financial.
Details Of The Bid
The Voyager Digital saga seems to be coming to a close, with FTX winning the auction to acquire the assets of the embattled crypto lender. FTX submitted the highest bid, valued at $1.4 billion, according to the statement released by Voyager Digital. The auction process for the assets of the lender lasted for two weeks and was highly competitive.
The FTX bid consisted of two things, the fair market value of Voyager’s crypto holdings at a yet-to-be-determined date. At current market prices, this figure is estimated to be around $1.311 billion. Additionally, an estimated incremental value of $111 million has also been considered. The announcement stated that Voyager’s bankruptcy estate, which also includes claims against Three Arrows Capital (3AC), would be distributed to creditors upon recovery.
The Way Forward
Now that the bid has been accepted, the asset purchase agreement between FTX US and Voyager Digital will be presented to the United States Bankruptcy Court for the Southern District of New York on the 19th of October, 2022, for approval. Any objection to the transaction must be filed before the 12th of October, 2022. If there are no objections to the deal, the deal will be approved in accordance with a chapter 11 plan, subject to a creditor vote and other closing conditions.
The Voyager Digital Saga
Voyager Digital had filed for bankruptcy in July, with the company coming under intense scrutiny by industry observers due to its business practices. One claim, in particular, caught the eye of observers when the company stated in its marketing documentation that investor deposits were protected by FDIC (Federal Deposit Insurance Corporation) insurance.
FDIC insurance does protect bank-held cash deposits up to $250,000. However, the catch is that it does not cover cash converted to stablecoins. Additionally, Voyager’s loan book accounted for almost half of the company’s assets, with nearly 60% of the loan book comprising loans to Three Arrows Capital, which had also filed for bankruptcy in July.
FTX’s Aggressive Expansion
FTX is using the bear market to go on an acquisition spree in the crypto space, with Bankman-Fried going on record and stating that the company plans to spend billions on the acquisition of companies in the crypto space. The exchange has already completed several acquisitions as it looks to spend aggressively during the bear market. Additionally, FTX has stated that it will continue to support crypto projects if their collapse could have larger implications for the crypto space.
In fact, FTX had also made several attempts to bail out Voyager previously. FTX and Alameda had put in a joint bid for Voyager, which the crypto lender promptly rejected. A source close to FTX and familiar with the deal has stated that FTX is currently in the midst of raising a $1 billion funding round.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.