FTX To Pick Up Voyager Digital’s Assets for $1.4 Billion

Voyager says that West Realm Shires Inc. ("FTX US") has submitted the best bid for its assets following many rounds of bidding in an auction process that lasted two weeks. FTX’s bid is supported by Voyager’s Official Committee of Unsecured Creditors which the company says "actively participated in the competitive auction".

The $1.422 billion FTX offer is for the "fair market value of all Voyager cryptocurrencies" at an unspecified future date, which is estimated to be $1.311 billion at the current market price, and additional consideration that is estimated to add about $111 million in value. Voyager’s claims against Three Arrows will remain with the company’s bankrupt estate and any funds recovered from that action will be distributed to creditors it says.

The auction comes after Voyager’s voluntary reorganization process, which began on July 5, 2022, and the company says aims to give clients the most value possible. Since July 5th, Voyager has been engaged in a dual process looking at either a prospective sale or a solo restructuring. The company says it received numerous offers, but decided an asset auction was the best option for its stakeholders.

The move by the failed lenders once again proves the crypto maxim of "not your keys, not your Bitcoin", as the bulk of the assets Voyager will pass to FTX are investor deposits, although the company argues that the FTX bid "maximizes value and minimizes 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."

Curiously, FTX states that its "market-leading, secure trading platform will enable customers to trade and store cryptocurrency after the conclusion of the Company’s chapter 11 cases." It is unclear at this time if this means the assets Voyager passes to FTX will still remain in accounts allocated to its customers when it paused withdrawals back in July, or if FTX is merely suggesting ex-Voyager customers come trade on its platform with new funds when the dust settles.

Creditors Can Still Object

The asset auction is not necessarily a done deal, however, as creditors can still object. The United States Bankruptcy Court for the Southern District of New York will be asked to approve the asset purchase agreement on Wednesday, October 19, 2022 and the deadline for filing an objection to the deal is October 12. The sale to FTX US has to be completed in accordance with a chapter 11 plan, which must be approved by a majority of creditors and satisfy other standard closing requirements. Voyager says if the Bankruptcy Court approves the chapter 11 plan, it will work to swiftly complete the transaction with FTX.