November 28, 2022

According to those with knowledge of the situation, FTX and Binance have made the highest bids for the assets of defunct crypto lender Voyager Digital Ltd. , VYGVQ -5.89%, but neither offer has been approved yet The Wall Street Journal mentioned.

According to the sources, the current offer from Binance is around $50 million, which is slightly more than the rival offer from FTX.

Founded in 2019, Voyager ran a crypto-lending platform that received deposits from customers, paid interest on those deposits, and then leased the assets to third parties. In 2019, it went public through a reverse merger. The company’s market capitalization was $3.9 billion at the stock’s peak in 2021.

Voyager claimed it had $5 billion in total assets and $4.9 billion in total liabilities at the time of its July 2022 bankruptcy declaration.

So what does this mean?

Among the few beneficiaries of the crypto collapse are FTX and Binance. Both succeeded in increasing their market share. Sam Bankman-FTX, a subsidiary of Fried’s FTX, actively acquired distressed assets during the recession.

On September 13, Voyager’s assets were released auction. Wave Financial, a cryptocurrency investment manager, and trading platform CrossTower are other bidders.

It is also possible for a different bidder to submit a new competing bid. The winning bid will be revealed at a hearing in New York on September 29, but that could happen soon.

Where did all this start?

Voyager, which is headquartered in New York and trades in Toronto, filed for bankruptcy in July after the crypto sale led to an influx of withdrawal requests that drained the company’s cash reserves. At the time of filing, the value of its stock is down more than 95% from 2022.

Since it provided $1.1 billion, it was unable to meet the withdrawal requests and instead cut and eventually stopped it. Voyager loaned more than $650 million to a hedge fund Three Arrows Capital Limited, which is more than half of the total.

After creditors sued the company over the failure of the stablecoin TerraUSD, a British Virgin Islands court issued a liquidation order for Three Arrows in June.

The Alameda Research business was another borrower, and at the time of the bankruptcy filing, they owed $377 million in cryptocurrency to Voyager.

In its July bankruptcy filing, Voyager alleged that the company also sold a portion of itself to Alameda, which holds a 9.5% ownership position.

Alameda provided Voyager with two lines of credit in June, one for $200 million in cash and the other for 15,000 bitcoin. Alameda was Voyager’s largest creditor at the time of its bankruptcy, having an unsecured loan of $75 million.

Alameda agreed to Pay About 200 million dollars In a borrowed cryptocurrency in a court filing dated September 19 in exchange for $160 million in collateral that Voyager was holding.

Previous reports said FTX and Binance are vying to buy Voyager’s assets in last week’s bankruptcy auction in New York, according to earlier reports. The final results of the auction are expected to be announced on September 29, although that date may be earlier.

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