- FTX’s winning bid for bankrupt crypto firm Voyager Digital includes a cash payment of $51 million, with an additional $60 million in earnings and incentives.
- The bulk of the offer is for the fair market value of Voyager’s cryptocurrency, which Sam Bankman-Fried’s FTX will distribute pro-rata to customers who visit FTX’s platform.
- Crypto hedge fund Three Arrows Capital exploded after Voyager went bankrupt.
FTX’s $1.4 billion bid for bankrupt crypto firm Voyager Digital was announced earlier this week, but court filings indicate that the cash amount paid for the firm is significantly less — $51 million.
Most of FTX’s offering was focused on Voyager’s crypto holdings, amounting to $1.31 billion. Those holdings would be distributed on a proportionate basis to eligible creditors, the filing said.
Related Investment News
FTX founder Sam Bankman-Fried has pursued an aggressive buying spree in the crypto industry, plunging deeply discounted assets in the wake of defaults, bankruptcies and market turmoil.
In the Voyager deal, FTX’s consideration for non-crypto assets — users, intellectual property, and the structure of Voyager itself — constitutes a total of “at least $111 million,” the filing shows. Of this, only $51 million is for Voyager’s assets, intellectual property and user base. The remaining $60 million includes an accumulated $50 account credit for each Voyager user who successfully onboards with FTX and an “earnings” allowance of $20 million.
It was not immediately clear, based on the filing, who would benefit from earnings, which are often used in acquisitions as a way of encouraging company founders and management teams to buy.
Voyager’s most recent bankruptcy report indicated that the company had just shy of $900 million in crypto assets to clients, including $456.44 million in loans and $173.68 million held as collateral from borrowers. .
Voyager users who choose to migrate to FTX’s platform will receive a proportionate distribution of Voyager assets based on their share of Voyager’s overall holdings.
Voyager’s troubles surfaced when the firm made a $670 million loan to crypto hedge fund Three Arrows Capital (3AC) in early 2022. When 3AC defaulted on its debt obligations in late June, it unleashed a financial cascade that pushed Voyager into bankruptcy and 3AC’s founder in disguise.
FTX’s bid, if approved by creditors, would transfer Voyager’s loan balances — excluding the 3AC loan, which was not part of the deal — to FTX and, by extension, Bankman-Fried. The $51 million price tag for Voyager and its associated claims would represent a hefty discount, given FTX’s assumption of customer assets and loan balances.
watch: Voyager Digital files for bankruptcy amid crypto lender solvency crisis
Credit: www.cnbc.com /