According to several reports that emerged on Tuesday, Sam Bankman-Fried led FTX and Binance are leading the race to acquire bankrupt crypto lender Voyager Digital and its associated assets.
However, as of now, neither offer has been accepted, according to sources close to the matter.
Details Of The Bids
According to sources, the current bid from Binance stands at $50 million and is slightly higher than the bid lodged by FTX. Both Binance and FTX have emerged in a relatively strong position from the crypto market crash of 2022. This is in stark contrast to other players in the crypto space, such as Coinbase and BlockFi. Both were forced to cut costs significantly and also considerably cut down their workforce to deal with the bear market.
Both entities have managed to increase their market share during the pandemic significantly. FTX especially has acquired several distressed entities over the past couple of years as it consolidated its position during the pandemic. Binance and FTX have not responded to any request for comments so far. Earlier this year, Voyager had snubbed an approach from FTX, describing it as a “low-ball bid dressed up as a white knight rescue.”
The History Of Voyager
Voyager Digital was founded in 2019 and operated a crypto lending platform offering users interest on customer deposits before lending the assets to third parties. In 2019, Voyager Digital went public through a reverse merger, and at its peak, its market capitalization reached a staggering $3.9 billion.
However, when filing its bankruptcy, the company stated that its total assets were valued at $5 billion, while its liabilities stood at $4.9 billion. The auction for Voyager’s assets started on the 13th of September and included several bidders such as crypto investment manager Wave Financial along with trading platform CrossTower. However, with time still remaining for the winning bid announcement, we could see a new bidder also enter the fray.
Voyager’s Dramatic Collapse
Voyager Digital had filed for bankruptcy in July after the collapse, and the subsequent selloff of cryptocurrencies saw an unprecedented number of withdrawal requests that completely drained the company’s reserves. At the time of its bankruptcy, the company’s stock price had dropped by 95%.
To mitigate the crisis, Voyager limited and then paused withdrawal requests as it was unable to fulfill the withdrawal requests as it lent out over $1 billion to other companies. Out of this figure, over half, or $650 million, was lent to Three Arrows Capital. Three Arrows Capital was ordered by a court to liquidate after debtors sued the company. Another significant borrower was Alameda Research, also owned by Sam Bankman-Fried. At the time, Alameda had borrowed $377 million worth of crypto from Voyager.
Alameda also had a 9.5% equity stake in Voyager and had extended two credit lines to Voyager, $200 million in cash, and the second one being 15,000 BTC. At the time of bankruptcy, Alameda was its largest creditor, with an unsecured, outstanding loan of $75 million.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.