October 6, 2022

Sam Bankman-Fried is leading FTX and Binance in the race to buy bankrupt crypto lender Voyager Digital and its related assets, according to several reports that emerged on Tuesday.

However, so far, according to sources close to the matter, no offer has been accepted.

Details of offers

According to sources, Binance’s current offer is $50 million and is slightly higher than the offer made by FTX. Both Binance and FTX emerged in a relatively strong position after 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 significantly reduce their workforce to deal with the bear market.

Both entities managed to significantly increase their market share during the pandemic. FTX in particular has bought several distressed entities in recent years as it has strengthened its position during the pandemic. Binance and FTX have not yet responded to any requests for comment. Earlier this year, Voyager rejected FTX’s approach, describing it as “a low bid dressed up as a white knight’s bailout.”

History of Voyager

Voyager Digital was founded in 2019 and ran a crypto lending platform that offers users interest on customer deposits before lending assets to third parties. In 2019, Voyager Digital went public in a reverse merger, and at its peak, its market capitalization reached a whopping $3.9 billion.

However, when it filed for bankruptcy, the company stated that its total assets were valued at $5 billion, while its liabilities were $4.9 billion. The auction for Voyager’s assets began on September 13 and included several bidders such as crypto investment manager Wave Financial along with trading platform CrossTower. However, with time remaining until the winning bid is announced, we could see a new bidder also enter the fray.

Voyager’s dramatic collapse

Voyager Digital filed for bankruptcy in July after the collapse, and the subsequent cryptocurrency selloff led to an unprecedented number of withdrawal requests that completely depleted the company’s reserves. At the time of bankruptcy, the company’s stock price fell by 95%.

To mitigate the crisis, Voyager limited and then paused withdrawal requests because it was unable to meet withdrawal requests because it had borrowed more than $1 billion from other companies. Of this figure, more than half, or $650 million, was loaned to Three Arrows Capital. Three Arrows Capital was ordered into liquidation by a court after debtors sued the company. Another notable borrower was Alameda Research, also owned by Sam Bankman-Fried. in that time, Alameda borrowed $377 million worth of cryptocurrencies from Voyager.

Alameda also held a 9.5% stake in Voyager and provided two lines of credit to Voyager, $200 million in cash and the other was 15,000 BTC. At the time of the bankruptcy, Alameda was its largest creditor, with an unsecured, outstanding loan of $75 million.

Disclaimer: This article is for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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