April 21, 2024

FTX offered Voyager customers a way to speed up the return of funds

FTX offered Voyager customers a way to speed up the return of funds

FTX invited Voyager clients to open accounts in which proceeds from their claims forbankruptcy of a crypto broker. With the consent and approval of the court, they will have access to assets earlier than under the standard liquidation procedure.

The initiative was developed by the operators of the exchange and itsAmerican division of FTX Trading and West Realm Shires. Alameda Ventures, another structure associated with Sam Bankman-Freed, also took part.

In June, the latter provided a 200 million USDC loan and a 15,000 BTC (~$300 million) revolving line of credit to cryptocurrency broker Voyager Digital.

Alameda Research was the second borrower inthe volume of funds raised ($376.8 million) from Voyager Digital after Three Arrows Capital (3AC). The outstanding balance includes a $75 million unsecured loan, the largest on the list.

Customers who agree to the offer will be able towithdraw cash immediately or use it to purchase digital assets on FTX. It is voluntary and will presumably operate until the first days of August, according to a press release.

“We want […] to find the best way to restorean insolvent crypto business […] that will allow clients to get early liquidity and recover some of their assets without forcing them to speculate on bankruptcy results and take one-sided risks.”, said Bankman-Fried.

Plan does not include FTX buyoutloans made by Voyager to the liquidated hedge fund 3AC, or participation in related litigation. The management of the exchange is counting on the return of funds for this operation to the clients of the crypto broker, regardless of their decision.

Voyager Lawyers Called FTX Proposal"inaccurate or containing outright false statements." They explained that the plan would benefit AlamedaFTX at the expense of customers and "completely eliminate the value of assets that are of no interest to it."

"AlamedaFTX is proposing a liquidation in which FTXacts as a liquidator. The “fair value” of Voyager crypto assets and loans is subject to negotiation with AlamedaFTX. This is a bad deal [for crypto broker clients] […] under the guise of a ‘white knight’”,- the lawyers clarified.

Bankman-Fried said the offer would give Voyager customers the ability to access assets that would otherwise be on hold for the duration of the lawsuit.

“To be clarified, our offer will return 100% of the remaining assets to Voyager customers, including claims for anything returned in the future.”- he explained.

On July 5, Voyager Digital filed for bankruptcy in a New York court. The company's estimated liabilities range from $1 billion to $10 billion with about 100,000 customers.

Let us recall that the CEO of FTX promised to spend “billions” to purchase shares in other companies. 

Read more about Bankman-Fried in our educational flashcards.

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