Voyager Digital Holdings, a centralized crypto lender, has rejected an offer from FTX and its investment arm, Alameda Ventures to purchase its digital assets. Voyager insists that the FTX actions “are not value-maximizing” and potentially “harm customers.”
Voyager’s attorney submitted a letter of rejection in court on July 24. The delivery was part of proceedings of bankruptcy filed by Voyager. Through their attorneys, Voyager denounced the public offer by FTX and Alameda. The proposal was to buy out all Voyager’s assets and outstanding loans, except for the loan that defaulted to 3AC.
In the letter, Voyager said that publicizing such offers might put other prospective acquisitions at risk. FTX actions undermine a coordinated, private, competitive bidding process. The letter also states, “AlamedaFTX violated various commitments to the Debtors and the Bankruptcy Court.”
Representatives of Voyager have suggested that their plan to reorganize the entity is superior. According to them, it would deliver all their clients’ cash and as much of their crypto as possible. This has prompted the firm’s investors to question the plan’s viability.
Crypto hedge fund Three Arrows Capital (3AC) failed to make payments on a loan of $650 million from Voyager. The default led them to file for bankruptcy on July 5.
Alameda’s offer to Voyager
On July 22, three businesses connected to FTX CEO Sam Bankman-Fried made an offer to Voyager. The proposal would see Alameda absorb all Voyager’s assets. FTX or FTX US would sell and distribute the assets proportionally among consumers affected by the bankruptcy. FTX made the offer to Voyager on July 22.
Bankman-Fried stated that his idea was a method for Voyager users to recover their losses. He laid a plan for them to move on from the platform in a news release issued by FTX:
Voyager clients are not investors holding unsecured claims because they chose to take part in the firm’s bankruptcy. The reason for our collaborative call is to contribute to the establishment of a solution. A more effective method to resolve the financial issues of failing crypto business.
In a series of tweets sent at the end of the day on July 24, Bankman-Fried reiterated the logic behind his FTX’s intention to acquire Voyager. He claimed that Voyager clients have already been through enough. Thus, they should be able to retrieve their assets sooner rather than later. On Sunday, attorneys for Voyager stated that the arrangement is a liquidation of Voyager’s assets only that it benefits AlamedaFTX.
Voyager critical concerns
It also defined six ways the proposed plan could “harm customers.” The concerns included the potential for capital gains and tax consequences and the unfair capping of the value of the Voyager user’s account at its value as of July 5. Also, the efficient eradication of the VGX token would immediately destroy over $100 million in value.
“The AlamedaFTX offer is anything but disposal of crypto on the premise that benefits AlamedaFTX. It is a low-ball offer presented as a white knight rescue.” It read.
Besides, the letter disproved the rumor that AlamedaFTX had a better chance of winning purchase bids. Alameda claimed it had a continuous relationship with Voyager. But, the letter clarified that “Nothing could be farther from the reality as indicated by this response.”
Bankman-Fried has been a topic of discussion in acquisition-related talks since the meltdown began. BlockFi’s Zac Prince signed a deal on July 1 for FTX to deliver $240 million in credit to the firm, with a buyback option worth $640 million.
A report revealed that on July 20, Bankman-Fried was looking to raise $400 million for both FTX and FTX US. He aimed to increase their respective valuations to $32 billion and $8 billion. There is a belief that the fresh funding rounds would help the firm purchase more crypto startups.