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FTX US Wins Bidding War to Purchase Assets from Voyager Digital

BlockNews Team by BlockNews Team
September 28, 2022
in Business, Crypto, Media, Social
Reading Time: 3 mins read
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Crypto exchange platform FTX stood victorious after a bidding war to buy the assets of the bankrupt crypto broker Voyager Digital. According to a Voyager press release, the bid was valued at around $1.4 billion.

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After the successful bidding, the value of the Voyager Token (VGX) gained 3.76% for 76 cents. Among the bidders were Binance and CrossTower. Previously, in August of this year, Voyager Digital declined FTX’s offers because of “higher” acquisition proposals from other companies. Ultimately, the crypto firm bent the knee to the terms and conditions of the crypto exchange.

An Auction to Save the Crypto Lender

Simon Dixon, a former investment banker, said each bidder had their offers for Voyager. Details were also posted in the r/Invest_Voyager subreddit by username u/ProperStandard3. 

The post read as follows:

“FTX Trading, Binance, and CrossTower are competing in Voyager Digital’s auction, using two different approaches to acquiring the bankrupt crypto exchange’s assets, according to sources. FTX & Binance seek to transition current Voyager customers to their respective platforms & give the Voyager customers their pro rata share of the coins the debtors possess. In addition, both companies have proposed about $50 million of cash, with Binance offering a higher dollar amount, they added. The cash payment would go toward deficiency and other claims.”

Meanwhile, CrossTower had a different proposal: “CrossTower, however, proposed to keep the existing Voyager platform and app, which means customers do not need to transition and sign up for another one while enabling them to keep their Voyager Tokens, the sources said. Customers would also receive their pro rata shares of the coins available. They said that the exchange would share its revenue or another form of upside with customers for several years after closing a sale.”

Overall, regulation will play a vital role in the winner of the bid. Despite the Financial Conduct Authority from the UK warning FTX that it operates without government authorization, the exchange won the auction. 

The Federal Deposit Insurance Corporation (FDIC) also warned FTX about its “wrong information” regarding deposit insurance. However, Brett Harrison, President of FTX, clarified that the platform never had FDIC insurance in the first place. Instead, the USD deposits of the employers are kept in officially insured banks.

July Story Behind Voyager and FTX

As previously mentioned, Voyager Digital did not accept FTX as the company to buy the assets. In July, Alameda and FTX allied to help the bankrupt crypto broker. Before their offer, Voyager had already received competing deals and sent a cease and desist letter to AlamedaFTX because of the “wrong” information the collaborators said to the public.

Voyager was the first officially declared crypto firm in 2019 but filed for bankruptcy in July 2022. The issue remains about the blocked funds in the company’s bank account and a debt of $10 billion to 100,000 creditors. 

Voyager Digital CEO Stephen Ehrlich said he had a backup plan to refund the customer funds after the conclusion of the “fraud prevention process.” He claimed that the money would come from the Metropolitan Commercial Bank, although that was yet to be proven after the MCB had not answered his request to release the funds on July 15. 

Tags: BlockchaincryptoWeb3
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