Digital asset exchange FTX US’s $1.42 billion bid has won the auction to buy Voyager Digital, the bankrupt crypto brokerage announced Monday.
The bid accounts for $1.31 billion market value of all crypto on the Voyager platform and an “additional consideration” valued at around $111 million.
The deal comes two months after Voyager accused FTX’s billionaire owner, Sam Bankman-Fried, of trying to subvert its bankruptcy process by offering to give Voyager customers early liquidity, according to court documents.
At the time, Bankman-Fried’s trading firm Alameda Research proposed a buyout of Voyager’s digital assets and digital asset loans, with the exception of loans to Three Arrows Capital. Under the proposal, Voyager customers could have then opened an FTX account with cash from “a portion of their bankruptcy claims.” Voyager said in court documents that Alameda and FTX’s offer “was designed to generate publicity for itself rather than value for Voyager’s customers.”
Under Monday’s deal, Voyager customers will be able to transfer their business to FTX US once the plan is approved by the bankruptcy court, which will hear details of the agreement Oct. 19.
Voyager received multiple bids before determining FTX to be “the best alternative for Voyager stakeholders,” the company said.
“FTX US's 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,” Voyager said Monday.
As recently as last week, The Wall Street Journal reported FTX and Binance were front-runner in the two-week auction for Voyager’s assets, with each submitting bids of roughly $50 million.
Voyager filed for bankruptcy protection in July amid plummeting crypto market prices. The brokerage’s CEO, Stephen Ehrlich, said at the time that the company was pushed to do so by Singaporean crypto hedge fund Three Arrows Capital’s default on a $650 million loan it had received from Voyager.
Monday’s deal continues FTX’s expansion in the crypto space. The exchange agreed in July to a deal that would give it the option to buy BlockFi for as much as $240 million.
Shortly after Voyager filed for bankruptcy, the Federal Deposit Insurance Corp. (FDIC) said it was investigating marketing language the firm once used on its website. The language, since updated, raised concerns the brokerage may have misled customers into believing they would be reimbursed if the company failed. Voyager’s banking partner, Metropolitan Commercial Bank, clarified that individual Voyager customer accounts are eligible for insurance only if the bank were to fail, not Voyager.
FTX, too, has found itself on the FDIC’s radar. The exchange is one of five companies to which the regulator sent cease-and-desist letters last month, claiming the firms made false and misleading crypto-related claims about deposit insurance.