Binance and Other Crypto Firms Submit Bids for Bankrupt Voyager Digital Following the Failure of FTX

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Last Updated on November 25, 2022 by Bitfinsider

Binance and other crypto firms are considering takeover bids for troubled digital currency lender Voyager Digital following the bankruptcy filing of FTX, which had initially planned to acquire the company.

The crypto hedge fund Three Arrows Capital defaulted on a $670 million loan from Voyager in July, prompting Voyager to file for Chapter 11 bankruptcy protection, which aims to rebuild insolvent enterprises as viable commercial operations.

FTX’s American affiliate, FTX U.S., was slated to acquire Voyager for $1.4 billion after Sam Bankman-firm Fried’s won a U.S. bankruptcy auction. It was subsequently set back to square one when FTX filed for bankruptcy after experiencing its own bank-run-like withdrawal spike.

Customers of Voyager have been unable to withdraw funds after the company halted withdrawals in response to a widespread liquidity problem in the industry.

This week, Binance stated that its U.S. affiliate, Binance.US, intends to make a rescue offer for Voyager. Binance.US had offered to acquire Voyager during its insolvency auction.

Speaking on Bloomberg, Binance CEO Changpeng Zhao said Binance.

US “will submit a new proposal for Voyager now that FTX is no longer able to fulfill its pledge”

In addition, Zhao has established a $1 billion fund to assist struggling enterprises in the industry.

CrossTower, a crypto and NFT trading platform, was among the earliest bidders in the court auction for Voyager. The company says it intends to make a new bid for the business, however details are limited at this time.

The CrossTower spokesperson stated, “This is about stabilizing an industry, recovering trust, and reconstructing what is arguably the future of finance.”

“We will do so with financial and human resources, and we will engage with governments and policymakers to encourage openness.” One venture capital fund did not create the technology industry, and one recovery fund will not restore it.

According to a report from the Financial News newspaper in London, Wave Financial intends to launch a second bid to acquire Voyager after losing out to FTX first.

When contacted over WhatsApp, Matteo Perruccio, president of international for Wave, declined to comment on the report.

Voyager’s exchange token, VGX, was revitalized as a result of Wave’s proposal, he stated in an October interview.

Customers of Voyager anticipate that any corporate bailout of the company will include VGX, a token introduced by Voyager as a type of loyalty rewards program granting trading fee savings.

Perruccio told Bitfinsider in October, “We had some fairly creative ideas about how to deliver traffic at a much cheaper cost of acquisition and a greater per-customer balance, which were the two major issues at Voyager.”

Voyager halted trading and transfers of VGX in August and revealed a plan for clients to exchange their tokens for new ones on a separate network. The future of the token, whose value has dropped more than 85 percent since the beginning of the year, is unknown.

FTX U.S. had offered $10 million for all of the VGX held by Voyager and its affiliates. However, Voyager stated that it was seeking a “higher and better solution” for the token that was compatible with FTX U.S.

Along with its parent firm and several affiliates, including Alameda Research, FTX U.S. is now involved in bankruptcy proceedings in Delaware. Voyager initially rejected the company’s offer, calling it a “low-ball bid disguised as a white knight rescue.”

Ethos.io, a startup that Voyager purchased in 2019, is another participant in the muddled reorganization procedure. Voyager simply bought Ethos.io’s technology, and the company intends to relaunch as a new brand following Voyager’s demise.

Shingo Lavine, co-founder of Ethos.io, asserts that his company’s technology was essential to Voyager’s development of its crypto capabilities. He noted that Voyager had tremendous growth after adding support for dogecoin, a meme-inspired digital currency.

Shingo’s father and co-founder of Ethos.io, Adam Lavine, stated that the company has launched its own recovery scheme for VGX holders and Voyager creditors and has “so far received a positive response from the Voyager community.”

According to the elder Lavine, “several thousand customers representing 10% of the overall VGX market cap” have signed up for the recovery initiative thus far.


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