FTX and Binance made the top offer, VYGVQ -5.89%, for the assets of defunct cryptocurrency lender Voyager Digital Ltd., but neither was approved, according to people familiar with the matter. Wall Street Journal report.
According to sources, Binance’s current offer is around $50 million, which is slightly higher than what FTX’s rivals are offering.
Founded in 2019, Voyager operates a crypto lending platform that takes deposits from customers, pays interest on those deposits, and then leases the assets to other parties. In 2019, it went public through reverse mergers and acquisitions. The company’s market cap was $3.9 billion at its peak in 2021.
Voyager claims to have $5 billion in total assets and $4.9 billion in total liabilities when it files for bankruptcy protection in July 2022.
So what does this mean?
The few beneficiaries of the cryptocurrency collapse include FTX and Binance. Both have successfully expanded their trading market share. The Sam Bankman Company, Fried’s FTX, has been aggressively acquiring troubled assets during the recession.
On September 13, Voyager’s assets were auction. Cryptocurrency investment manager Wave Financial and trading platform CrossTower were the other two bidders.
It is also feasible that different bidders will submit new competitor offers. The winning bid will be announced at a hearing in New York on September 29, but it could happen sooner.
Where did all this start?
New York-based Voyager, which trades in Toronto, filed for bankruptcy in July after the cryptocurrency sell-off sparked massive demand for withdrawals that drained the company’s cash reserves. At the time of filing, its stock value was down more than 95% from 2022.
Because it had issued $1.1 billion, it was unable to satisfy withdrawal requests, but instead scaled back and eventually stopped them. Voyager lent more than $650 million to hedge fund Three Arrows Capital Ltd., more than half of the total.
The British Virgin Islands court issued a liquidation order against Three Arrows in June after creditors filed a lawsuit against the business following the failure of stablecoin TerraUSD.
Trading firm Alameda Research is another borrower that owed Voyager $377 million in cryptocurrency when it filed for bankruptcy protection.
In its bankruptcy filing in July, Voyager claimed the company also sold a portion of itself to Alameda, which holds a 9.5% ownership.
Alameda gave Voyager two lines of credit in June, one for $200 million in cash and the other for 15,000 bitcoins. When Voyager filed for bankruptcy, Alameda was its largest creditor, holding an unsecured loan of $75 million.
Alameda agreed repay about $200 million Cryptocurrencies borrowed in a Sept. 19 court filing in exchange for $160 million in collateral held by Voyager.
As reported earlier, FTX and Binance were reportedly competing to buy Voyager’s assets in a bankruptcy auction in New York last week. The final results of the auction are expected to be announced on September 29, although that date may be earlier.