FTX is paying $51 million in cash for Voyager assets, court records show

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  • 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.

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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.

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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.

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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.

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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 /

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