Sam Bankman-Fried, founder and CEO of the FTX cryptocurrency derivatives exchange, speaks in an interview with David Rubenstein in New York, USA, on an episode of Bloomberg Wealth, Wednesday, August 17, 2022. .
Gina Moon | Bloomberg | Bloomberg | Getty Images
Customers of beleaguered crypto lender Voyager Digital are set to take over FTX, the bitcoin exchange founded by billionaire Sam Bankman-Fried, after it wins a bankruptcy auction. You may find solace in the news.
After several bids, FTX’s U.S. subsidiary was selected as the highest bidder for Voyager’s assets, the companies said in a statement late Monday. The bid was approximately $1.4 billion, which includes the fair market value of Voyager’s digital assets of $1.3 billion and an “additional consideration” of $111 million in expected incremental value.
Voyager declared Chapter 11 bankruptcy in July after the price of its digital currency crashed and it became unable to redeem customer withdrawals. The company’s collapse was partly due to the collapse of Three Arrows Capital, a so-called hedge fund that was financed by other institutions such as Voyager to engage in risky gambling with tokens, including the collapsed stablecoin terraUSD. It is caused. In June, 3AC defaulted on her $670 million worth of loans from Voyager.
Voyager has hinted at a possible migration of customers to FTX US, saying the exchange will “enable customers to trade and store cryptocurrencies after the company’s Chapter 11 lawsuit is over.” . The asset purchase agreement will be filed with the US Bankruptcy Court for the Southern District of New York for approval on October 19th. The sale of Voyager’s assets to FTX US is subject to votes by creditors and other customary closing conditions. ,” according to the statement.
The move marks a potential step to compensate Voyager users who have little legal recourse to get paid for cryptocurrencies stored on the platform before freezing customer withdrawals. customers of the cryptocurrency platform are treated as unsecured creditors. This means that you are not actually entitled to receive the virtual currency you purchased and, like any other creditor, you will have to go through court to get your money back. Creditors of Mt. Gox, which went bankrupt in 2014, are still awaiting repayment.
In the past, Voyager claimed on its website and in marketing materials that user funds were protected by the Federal Deposit Insurance Corporation, but technically this was not true. FDIC insurance only covers bank failures, not Voyager. In July, the FDIC and Federal Reserve sent Voyager a cease and desist letter. Ordered to stop claiming to be FDIC insured.
In Crypto Winter 2022Bankman-Fried has emerged as a savior to many companies that have fallen victim to liquidity issues on their platforms as the value of their digital tokens plummeted. The 30-year-old quant his trader-turned-crypto extraordinaire bargain shopping amidst the industry’s recent carnage.
In July, FTX signed a deal giving it the option to buy moneylender BlockFi after offering a $250 million line of credit, Bankman-Fried said he still has enough cash to spend on further transactions. Say you haveAnd he could receive more soon, CNBC FTX said Raise another $1 billion From investors in upcoming funding rounds.
– CNBC’s Kate Rooney contributed to this report