Crypto exchange FTX US has won the auction to purchase the assets of Canada’s Voyager Digital, the bankrupt digital assets lender, with a bid of just over $1.4bn.
The agreement, unveiled late on Monday, ends a two-week sale process after Voyager filed for bankruptcy protection in July in the wake of the collapse in crypto market prices.
Voyager, a popular digital asset lender, offered customers high yields for depositing funds on its platform, but halted withdrawals when it was stricken in the crypto market downturn. In particular, Voyager was caught out by the collapse of Three Arrows Capital, suffering losses of more than $650mn on a loan to the crypto hedge fund. Court documents showed the lending platform had more than 100,000 creditors and billions of dollars in liabilities.
The deal also marks a further expansion of billionaire Sam Bankman-Fried’s influence on crypto markets. The FTX founder has been looking at assets that have been laid low by the market collapse. FTX agreed a deal to support lender BlockFi in July, with an option to buy for $240mn.
Voyager had previously rebuffed an approach by the billionaire to buy the assets, describing an offer as a “lowball bid dressed up as a white knight rescue”.
Sam Bankman-Fried was already a crucial player at Voyager. His Alameda Research trading company had borrowed $377mn worth of cryptocurrency from Voyager, its second-largest loan after the one extended to Three Arrows. Alameda had also lent $75mn to Voyager earlier this year as it became distressed. It also owned nearly a tenth of Voyager’s effectively worthless stock, which was delisted in Toronto in August.
The winning bid was valued at approximately $1.4bn, comprising of the fair market value of all Voyager cryptocurrency at a “to-be-determined date in the future”, Voyager said in a statement. Currently, the value of all Voyager cryptocurrency is estimated to be $1.3bn.
“FTX US’s bid maximises value and minimises the remaining duration of the company’s restructuring by providing a clear path forward for the debtors to consummate a Chapter 11 plan and return value to their customers and other creditors,” Voyager said in a statement.
The deal will be subject to approval from a bankruptcy court in New York next month.
Voyager added that the company received multiple bids, and based on the results of the auction “determined that the sale transaction with FTX is the best alternative for Voyager stakeholders”.
A spokesperson for Wave Financial, a Los Angeles and London-based crypto investment management company, said it had also made a bid for the assets.