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Voyager rejects Alameda buyout offer because it ‘damages customers’

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Centralized crypto lender Voyager Digital Holdings has rejected an offer by FTX and its investment arm Alameda Ventures to buy back its digital assets on the grounds that the actions “do not maximize value” and potentially “detriment to customers.”

In a dismissal letter filed July 24 as part of ongoing bankruptcy proceedings, Voyager’s lawyers condemned the offer, made public by FTX, FTX US and Alameda on July 22, to buy out all of Voyager’s assets and outstanding loans, except those in delinquency. credit in 3AC.

The letter said that making such offers public could jeopardize any other potential deals by disrupting the “consensual, confidential, competitive bidding process,” adding that “AlamedaFTX has violated many obligations to debtors and the bankruptcy court.”

Voyager representatives suggested that their own proposed plan to reorganize the company is better, as they say it will allow them to quickly deliver all of their customers’ cash and as much of their cryptocurrency as possible.

Voyager filed for bankruptcy on July 5 in the Southern District of New York for over $1 billion in insolvency after hedge fund Three Arrows Capital (3AC) defaulted on a $650 million loan from the firm.

On July 22, three companies associated with FTX CEO Sam Bankman-Freed proposed a deal to Voyager in which Alameda would take over all of Voyager’s assets and use either FTX or FTX US to sell them and prorate them to users affected by the bankruptcy.

FTX Bankman-Fried press release said that his proposal was a way for Voyager users to recoup their losses and leave the platform:

“Voyager clients did not choose to be bankrupt investors with unsecured claims. The purpose of our joint proposal is to help find the best way to resolve an insolvent cryptocurrency business.”

Bankman-Fried doubled down on his firms’ arguments about the offer to acquire Voyager on Twitter. a thread late on the evening of 24 July. He stated that Voyager’s clients “have already been through enough” and should be able to claim their assets if they want them sooner rather than later because the bankruptcy process “could take years.”

Voyager’s lawyers said Sunday that the deal to make Voyager users whole is essentially just a liquidation of Voyager’s assets “on a basis that benefits AlamedaFTX.”

It also outlined six ways in which the proposal could “harm customers”, including capital gains tax implications, unfairly capping the value of each Voyager user’s account by their July 5th value, and effectively eliminating the VGX token, which would “destroy at an immediately greater than $100 million.”

“The AlamedaFTX proposal is nothing but a cryptocurrency liquidation based on the benefits of AlamedaFTX. It’s a cheap bet disguised as saving the white knight.”

The letter also dismissed speculation that AlamedaFTX is more likely to win acquisition bids due to the ongoing relationship between the two firms, stating, “Nothing could be further from the truth, as evidenced by this response.”

Bankman-Fried was at the center of other acquisition talks in the midst of a dramatic bear market. On July 1, the CEO of another centralized crypto lender BlockFi, Zach Prince, signed a deal with FTX to provide the firm with a $240 million loan with a buyout option totaling $640 million.

Connected: SBF: Crypto Winter Is Coming to an End, FTX Profits as Lender of Last Resort

On July 20, Cointelegraph reported that Bankman-Fried is seeking $400 million in funding for FTX and FTX US to bring their valuation to $32 billion and $8 billion, respectively. The new funding rounds are expected to support the acquisition of other crypto firms.