Centralized crypto lender Voyager Digital Holdings has rejected an offer from FTX and its funding arm Alameda Ventures to buyout its digital property on the grounds that the actions “aren’t value-maximizing” and potentially “harms clients.”
In a rejection letter filed in court on July 24 as part of its ongoing bankruptcy proceedings, Voyager’s lawyers denounced the offer made public by FTX, FTX US, and Alameda on July 22 to buy out all of Voyager’s assets and outstanding loans – except the defaulted loan to 3AC.
The letter states that making such offers public could jeopardize any other potential deals by subverting “a coordinated, confidential, competitive bidding process,” adding “AlamedaFTX violated many obligations to the Debtors and the Bankruptcy Court.”
Voyager’s representatives suggested that their own proposed plan to reorganize the company is better as they say it would promptly deliver all of their customers’ cash and as much of their crypto as possible.
You have all heard the terms “hero,” “bailout,” “rescue,” and “assist” in reference to FTX saving distressed corporations. Voyager, one of many aforementioned corporations, disagrees – they assume that SBF’s deal is extraordinarily predatory and can really harm clients much more. https://t.co/l726t4U4RR pic.twitter.com/NeARz3lRiP
— FatMan (@FatManTerra) July 24, 2022
Voyager filed for chapter on July 5 within the Southern District of New York for insolvency price greater than $1 billion after crypto hedge fund Three Arrows Capital (3AC) defaulted on a $650 million mortgage from the agency.
On July 22, the three corporations tied to FTX CEO Sam Bankman-Fried provided Voyager a deal that will see Alameda would assume all of Voyager’s property and use FTX or FTX US to promote and disperse them proportionally to customers affected by the chapter.
In FTX’s press launch, Bankman-Fried mentioned that his proposal was a method for Voyager customers to recuperate their losses and transfer on from the platform:
“Voyager’s customers did not choose to be bankruptcy investors holding unsecured claims. The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business.”
Bankman-Fried doubled-down on his firms’ reasoning for proposing to acquire Voyager in a Twitter thread late on July 24. He stated that Voyager’s customers have “been through enough already,” and should be able to claim their assets if they want them sooner than later because bankruptcy proceedings “can take years.”
13) Anyway: in the long run, we predict Voyager’s clients ought to have the appropriate to shortly declare their remaining property if they need, with out lease in search of within the center.
They’ve been by means of sufficient already.
— SBF (@SBF_FTX) July 25, 2022
On Sunday, Voyager’s attorneys mentioned the deal, which purports to make Voyager customers entire, is actually only a liquidation of Voyager’s property “on a basis that advantages AlamedaFTX.”
It additionally outlined six methods by which the proposal may “harm customers”, together with capital beneficial properties tax penalties, unfairly capping the worth of every Voyager consumer’s account at their July 5 worth, and the efficient elimination of the VGX token, which might “destroy in excess of $100 million in value immediately.”
“The AlamedaFTX proposal is nothing more than a liquidation of cryptocurrency on a basis that advantages AlamedaFTX. It’s a low-ball bid dressed up as a white knight rescue.”
The letter additionally refuted hypothesis that AlamedaFTX had a larger likelihood of successful acquisition bids attributable to ongoing relationships between the 2 companies, stating: “Nothing could be further from the truth as evidenced by this response.”
Bankman-Fried, has been on the heart of different acquisition talks within the midst of a dramatic bear market. On July 1, CEO of one other centralized crypto lender BlockFi’s Zac Prince penned a deal for FTX to ship $240 million in credit score to the agency, with a buyout choice price a complete of $640 million.
Related: SBF: Crypto winter winding down, FTX to show a revenue as it serves as lender of final resort
On July 20, Cointelegraph reported that Bankman-Fried was in search of $400 million in funding for FTX and FTX US to convey their valuations to $32 billion and $8 billion respectively. The new funding rounds are anticipated to assist acquisitions of different crypto companies.