Crypto exchange FTX to acquire bankrupt Voyager’s assets

(Reuters) – Voyager Digital said on Monday crypto exchange FTX, whose bailout proposal the bankrupt lender had rejected earlier this year, has won its assets in a $1.42-billion bid at an auction.

The FTX bid comprises a fair market value of all Voyager cryptocurrency, at a to-be-determined date, which is pegged at about $1.31 billion at current market prices and an additional $111 million in incremental value, Voyager said in a statement.

The company added that its claims against hedge fund Three Arrows Capital will remain with the bankruptcy estate, which will distribute any available recovery on such claims to the estate’s creditors.

Voyager issued a notice of default to the Singapore-based hedge fund in June, for its failure to make required payments on a loan of 15,250 bitcoin.

The company in July spurned a proposal from FTX, founded by billionaire Sam Bankman-Fried, as a “low-ball bid dressed up as a white knight rescue” and alleged the plan would disrupt its bankruptcy process.

Bankman-Fried has been throwing lifelines to shore up companies in a shaky digital assets sector, aggressively acquiring assets, technologies and customers of distressed crypto companies at cheap valuations.

FTX in July revealed a 7.6% stake in Robinhood Markets Inc and handed U.S. cryptocurrency lender BlockFi a $250 million revolving credit facility in June along with a deal giving FTX the right to purchase it based on certain performance triggers.

Crypto lenders including Voyager boomed during the COVID-19 pandemic, attracting depositors with high interest rates and easy access to loans rarely offered by traditional banks. However, the slump in crypto markets has hurt crypto companies and investors.

In its Chapter 11 bankruptcy filing in July, Voyager estimated that it had more than 100,000 creditors and between $1 billion and $10 billion in assets, as well as liabilities of the same value.

(Reporting by Juby Babu, Shubhendu Deshmukh and Mehnaz Yasmin in Bengaluru; Editing by Rashmi Aich and Vinay Dwivedi)