Lawyers representing Voyager Digital have described a joint proposal to bail out the bankrupt crypto lender from FTX and Alameda as a “low-ball bid dressed up as a white knight rescue.”
Voyager has been thrown a lifeline from crypto billionaire Sam Bankman-Fried, offering to provide its customers with early-access liquidity. Under the proposed restructuring deal, West Realm Shires — owner and operator of FTX US and Alameda Ventures — would buy all of Voyager’s crypto assets and loans in cash at market value, except the loans to bankrupt crypto hedge fund Three Arrows Capital.
If approved, Voyager customers would be able to claim a portion of their funds that were frozen earlier this month. Meanwhile, FTX would offer customers an option to receive their share of claims by opening a new account at FTX.
In response, Voyager’s bankruptcy lawyers have entered a public spat with Sam-Bankman Fried whose offer was described by them as harmful, highly misleading and only benefits FTX.
“The AlamedaFTX proposal is nothing more than a liquidation of cryptocurrency on a basis that advantages AlamedaFTX. The plan transfers significant value to AlamedaFTX, and completely eliminates the value of assets that are of no interest to AlamedaFTX,” Voyager’s response read.
“It seems clear, however, that AlamedaFTX’s Proposal, which was made in contravention of the proposed Bidding Procedures, was designed to generate publicity for itself rather than value for Voyager’s customers,” they added.
In a tweet thread, FTX founder and CEO Sam-Bankman Fried responded by saying that his plan would give Voyager’s customers the ability to access assets that would otherwise be locked up for a significant time. He added that only the bankruptcy lawyers would benefit from dragging out the proceedings as the case navigates through bankruptcy court, while the customers would “get fucked.”
“To clarify: Our offer would give Voyager customers back 100% of the remaining assets that Voyager has, including claims on anything recovered in the future,” Bankman-Fried tweeted.
Earlier in June, Voyager Digital has entered into an agreement with Alameda Ventures to extend a previous credit facility, which was intended to help it meet customer liquidity needs. Bankman-Fried-led Alamada Research offered to extend a credit line of $200 million in cash and USDC alongside a 15,000 BTC revolver.
In addition to this facility, Voyager has approximately $152 million cash and owned crypto assets on hand, as well as $20 million of cash that is restricted for the purchase of USDC. The TSX-listed firm also issued 3AC a formal notice of default to recover roughly $660 million allegedly loaned to the Singapore-based hedge fund.
Alameda’s obligation to provide funding was subject to certain conditions, which include: “no more than US$75 million may be drawn down over any rolling 30-day period; the Company’s corporate debt must be limited to approximately 25 percent of customer assets on the platform, less US$500 million; and additional sources of funding must be secured within 12 months.”