Centralized cryptocurrency lender Voyager Digital Holdings has rejected an offer from FTX and its investment arm Alameda Ventures to buy its digital assets on the grounds that the shares are “not maximizing value” and potentially “harming customers.”
In a rejection letter filed with the court on July 24 as part of its ongoing bankruptcy proceedings, Voyager’s attorneys denounced the offer made public by FTX, FTX US and Alameda on July 22 to purchase all of the assets and Voyager loans payable, except for the loan to 3AC which would remain the lender’s problem.
The letter asserts that making those offers public could jeopardize any other potential deals by subverting “a coordinated, confidential and competitive bidding process,” adding that “Alameda/FTX violated many obligations to debtors and the Bankruptcy Court.”
Voyager representatives suggested that their own proposed plan to reorganize the company is better, saying it would quickly hand over all of its customers’ money and as much of its cryptocurrency as possible.
You have all heard the terms “hero,” “bailout,” “rescue,” and “help” in reference to FTX saving distressed companies. Voyager, one of the aforementioned companies, disagrees – they think that SBF’s deal is extremely predatory and will actually hurt customers even more. https://t.co/l726t4U4RR pic.twitter.com/NeARz3lRiP
— FatMan (@FatManTerra) July 24, 2022
Voyager filed for bankruptcy on July 5 in the Southern District of New York for more than $1 billion insolvency after cryptocurrency hedge fund Three Arrows Capital (3AC) defaulted on a $650 million loan from the company. .
On July 22, the three companies linked to FTX CEO Sam Bankman-Fried offered Voyager a deal whereby Alameda would take over all of Voyager’s assets and use FTX or FTX US to sell and distribute them proportionately to affected users. bankruptcy.
In the FTX press release, Bankman-Fried said that his proposal was a way for Voyager users to recover their losses and leave the platform:
“Voyager clients did not choose to be bankrupt investors who have unsecured claims. The goal of our joint proposal is to help establish a better way to resolve an insolvent cryptocurrency business.”
Bankman-Fried reaffirmed his company’s rationale for proposing the acquisition of Voyager in a thread from Twitter at the end of July 24. He said Voyager’s clients “have been through enough” and should be able to claim their assets if they want them sooner rather than later because bankruptcy proceedings “can take years.”
13) Anyway: in the end, we think Voyager’s customers should have the right to quickly claim their remaining assets if they want, without rent seeking in the middle.
They’ve been through enough already.
— SBF (@SBF_FTX) July 25, 2022
On Sunday, Voyager’s lawyers said the deal, which is intended to see Voyager users paid in full, is essentially just a liquidation of Voyager’s assets “on a basis that benefits Alameda/FTX.”
It also outlined six ways the proposal could “hurt customers,” including capital gains tax consequences, unfairly capping the value of each Voyager user’s account at its July 5 value, and effectively deleting of the VGX token, which would “destroy over $100 million in value immediately.”
“The Alameda/FTX proposal is nothing more than a cryptocurrency sell-off on a basis that benefits Alameda/FTX. It is a downward offer disguised as a white knight bailout.”
The letter also refuted speculation that Alameda/FTX had a better chance of winning the takeover bids due to the existing relationships between the two companies, stating, “Nothing could be further from the truth, as this response demonstrates.”
Bankman-Fried has been at the center of other takeover talks amid a dramatic bear market. On July 1, the CEO of another centralized cryptocurrency lender, Zac Prince, drafted an agreement for FTX to send $240 million in credit to the company, with an option to buy worth a total of $640 million.
On July 20, Cointelegraph reported that Bankman-Fried was seeking $400 million in funding for FTX and FTX US to bring their valuations to $32 billion and $8 billion, respectively. The new funding rounds are expected to support acquisitions of other struggling crypto firms.
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