October 1, 2022

According to those with knowledge of the situation, FTX and Binance have made the highest bids for the assets of defunct cryptocurrency lender Voyager Digital Ltd., VYGVQ -5.89% but no offer has yet been approved, The Wall Street Journal registered.

According to sources, Binance’s current offer is around $50 million, which is slightly higher than the competing offer from FTX.

Founded in 2019, Voyager ran a crypto-lending platform that took deposits from customers, paid interest on those deposits, and then leased assets to other parties. In 2019, it went public through a reverse merger. The company’s market value was $3.9 billion at the stock’s peak in 2021.

Voyager claimed it had $5 billion in total assets and $4.9 billion in total liabilities at the time of its July 2022 bankruptcy filing.

What it means?

Among the few beneficiaries of the crypto collapse are FTX and Binance. Both have managed to increase their market share. Sam Bankman’s company, Fried’s FTX, actively acquired distressed assets during the recession.

On September 13, Voyager’s assets were made available auction. Wave Financial, a cryptocurrency investment manager, and trading platform CrossTower are two other bidders.

It is also possible for another bidder to submit a new competitive bid. The winning bid will be announced at a hearing in New York on September 29, but it could happen sooner.

Where did this all start?

Voyager, which is based in New York and trades in Toronto, filed for bankruptcy in July after a selloff in the cryptocurrency sparked a flood of withdrawal requests that depleted the company’s cash reserves. At the time of the filing, the value of its shares was down more than 95% from 2022.

Having given away $1.1 billion, he was unable to meet withdrawal requests and instead scaled back and eventually stopped them. Voyager lent more than $650 million to Three Arrows Capital Ltd., a hedge fund, accounting for more than half of the total.

After creditors launched a lawsuit against the business following the collapse of stablecoin TerraUSD, a court in the British Virgin Islands ordered Three Arrows into liquidation in June.

Trading company Alameda Research was another borrower, and at the time of the bankruptcy filing, they owed Voyager $377 million in cryptocurrency.

In a bankruptcy filing in July, Voyager claimed that the company also sold part of itself to Alameda, which held a 9.5% ownership position.

Alameda gave Voyager two lines of credit in June, one for $200 million in cash and the other for 15,000 bitcoins. Alameda was Voyager’s largest creditor at the time of the bankruptcy filing, holding $75 million in unsecured credit.

Alameda agreed to repay about 200 million dollars in borrowed cryptocurrency in a Sept. 19 court filing in exchange for $160 million in collateral held by Voyager.

FTX and Binance reportedly battled to buy Voyager’s assets at a bankruptcy auction held last week in New York, according to earlier reports. The final results of the auction are expected to be announced on September 29, but this date could be earlier.

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