Voyager rejects Alameda takeover offer because it ‘harms customers’

Centralized crypto lender Voyager Digital Holdings has rejected an offer from FTX and its investment arm Alameda Ventures to buy back its digital assets on the grounds that the shares “fail to maximize value” and potentially “harm customers”.

In a letter of rejection filed in 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 buy all assets and loans outstanding from Voyager – except loans in default loan to 3AC.

The letter states that making these bids public could jeopardize any other potential transactions by subverting “a coordinated, confidential and competitive bidding process,” adding “AlamedaFTX violated numerous obligations to debtors and the bankruptcy court.”

Voyager representatives have suggested that their own proposed plan to revamp the business is better because they say it would quickly deliver all of their customers’ money and as much of their crypto as possible.

Voyager filed for bankruptcy on July 5 in the Southern District of New York for insolvency worth more than $1 billion after crypto hedge fund Three Arrows Capital (3AC) defaulted on a $650 loan. million dollars from the company.

On July 22, the three companies linked to FTX CEO Sam Bankman-Fried offered Voyager a deal whereby Alameda would assume all of Voyager’s assets and use FTX or FTX US to sell and disperse them proportionately to affected users. bankruptcy.

In the FTX press release, Bankman-Fried said that his proposal was a way for Voyager users to recoup their losses and exit the platform:

“Voyager customers did not choose to be bankrupt investors holding unsecured debt. The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business.”

Bankman-Fried doubled down on his companies’ reasoning to offer to acquire Voyager in a Twitter thread late July 24. He said Voyager customers “had already been through enough” and should be able to reclaim their assets if they wanted sooner rather than later, as bankruptcy proceedings “can take years”.

On Sunday, Voyager’s attorneys said the deal, which purports to return Voyager users whole, is essentially just a liquidation of Voyager’s assets “on a basis that benefits AlamedaFTX.”

He also outlined six ways the proposal could “harm customers,” including capital gains tax consequences, unfairly capping each Voyager user’s account value at their July 5 value, and effectively eliminating of the VGX token, which “would destroy over $100 million in value immediately.

“The AlamedaFTX proposal is nothing more than a cryptocurrency sell-off on a basis that favors AlamedaFTX. It is a low offer disguised as a white knight bailout.

The letter also refuted speculation that AlamedaFTX was more likely to win takeover bids due to the ongoing relationship between the two companies, stating, “Nothing could be further from the truth, as evidenced by this response. .”

Bankman-Fried, has been at the center of other acquisition talks amid a dramatic bear market. On July 1, the CEO of another centralized crypto lender, BlockFi’s Zac Prince, signed an agreement for FTX to send $240 million in credit to the company, with an option to buy back a total value of of $640 million.

Related: SBF: Crypto Winter Ends, FTX to Turn a Profit as it Serves as Lender of Last Resort

On July 20, Cointelegraph reported that Bankman-Fried was seeking $400 million in funding for FTX and FTX US to raise their valuations to $32 billion and $8 billion respectively. New funding rounds should support acquisitions of other crypto companies.