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September 27, 2022

Voyager Accepts FTX US Bid And Will Let it Acquire Assets

FTX US, the United States section of the global cryptocurrency exchange FTX, has emerged victorious in the competition to acquire the insolvent cryptocurrency lender Voyager Digital’s assets. Voyager indicated that the FTX US offer is valued at about 1.42 billion dollars. This was in a press announcement that was issued on Monday evening.

According to the release, Voyager has decided to accept the exchange’s buyout offer of $1.4 billion. This means that the exchange has won the competition to acquire the insolvent company. It has beat out both Binance and Wave Financial.

Reportedly, Voyager received various offers considered sale and reorganization possibilities and conducted an auction. Moreover, based on the results of the auction. They have decided that the sale transaction with FTX is the best solution for Voyager stakeholders.

Per the statement, the FTX US proposal includes a fair market value of all Voyager crypto assets. They will do so at a point in the future that has not yet been established. The fair market value of all Voyager crypto assets is estimated to be about $1.311 billion based on current market pricing. The proposal also contains further consideration, which is projected to have an added worth of 111 million dollars.

According to Voyager, the bid made by FTX US maximizes value and minimizes the remaining duration of the Company’s restructuring. They’re providing a clear path forward for the Debtors to consummate a chapter 11 bankruptcy plan. And return value to their customers and other creditors. FTX US’s bid also provides a clear path forward for the Debtors to return value to their customers and other creditors.

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The Voyager Digital Debacle

The first step was taken in July, when “market circumstances” were cited as the reason for freezing user assets and pausing trade. Voyager gave this explanation. Then, in the month of August, a total of $270 million was made available for withdrawal. This was a part of the bankruptcy petition for the company.

On the surface, Voyager Digital has several features that are typical of successful commercial enterprises. Voyager is a publicly traded company that can be found on the Toronto Stock Exchange (TSX) trading under the ticker symbol VOYG.

According to the plea for bankruptcy filed by Voyager, Three Arrows Capital defaulted on debts. They were in the amount of 15,250 bitcoin and 350 million US dollars in June of 2022. As per the company’s public exposure for the first quarter of 2022. These loans made up more than half of Voyager’s total loan book. In addition to not having any security attached to them, the loans recalled a highly concentrated exposure to a single counterparty.

There is no comparison between deposits made in cryptocurrency with a cryptocurrency lending platform and deposits made at a regular bank. The primary distinction between the two is that one is mostly unregulated in its operations while the other is highly controlled. Retail shoppers want a dependable atmosphere that does not place them in danger. In the event that they fail to read the legalese pertaining to rehypothecation.

In the meanwhile, after the announcement of the acquisition deal, the value of Voyager’s native token. VGX, increased by more than 2% during the day and was trading at $0.7032. This was at the time this article was written.