Voyager Digital, a bankrupt crypto brokerage, has described a rescue proposal by FTX as “a low-ball offer dressed up like a white knight rescue.” Sam Bankman-Fried’s FTX was once hailed the savior for crypto winter. However, in the latest twist to its acquisition streak, the company was accused of under-valuing one of its rescue deals.
Voyager Digital, a bankrupt crypto brokerage, has described a rescue offer by FTX as “a low-ball proposal dressed up like a white knight rescue” according to documents filed at the Southern District Court on Sunday night.
Voyager stated that the proposal by FTX, Bankman-Fried’s firm Alameda, was “designed to generate publicity rather than provide value for Voyager customers.”
Voyager claimed further that the manner in which the proposal was made via a press release could compromise a separate bidding process to acquire the company’s assets.
The documents stated that the proposal by AlamedaFTX is nothing more than a liquidation on cryptocurrency on a base that benefits AlamedaFTX.
Voyager filed bankruptcy protection July 5, and presented a plan to reorganize and return cash to shareholders.
It has been exploring other options through discussions with over 80 third-party investors, and has requested indications of interest from potential buyers as early as Friday.
Voyager outlines in the new filing a number of issues it has with FTX’s proposal and Alameda’s. This includes the allegation the bidder “openly disparaged” Voyager and included statements that were “at best, highly misleading” in its press release.
Alameda’s and FTX’s assertions that Voyager customers have a fixed amount based upon the value of their wallets as of July 5, 2007, when the exchange filed for Chapter 11 bankruptcy relief, is a sticking point. Voyager, however, disagreed with this notion and stated that its plan to reorganize the company does NOT limit customer claims.
Voyager estimates that the rescue deal would effectively end the platform’s VGX token. Voyager also believes it would instantly destroy $100 million.
Other issues include the tax burden for customers who wish to withdraw cash and confusion over the fact FTX said that Voyager has no independent value but would like a discount on the acquisition price if it was sold to another company.
FTX’s ‘white-knight’ deals
Voyager is one of several distressed crypto firms has been eyeing in the wake of the market crash. It acquired Bitvo in Canada and is currently looking to buy BlockFi, a troubled lender.
Bankman-Fried spoke of FTX’s “responsibility to stabilize crypto ecosystem by stepping into where possible. This concept was also mentioned in FTX’s proposal to acquire Voyager’s digital assets, loans, and other financial institutions. Alameda said that FTX and FTX wanted to demonstrate that crypto business can be solved like other financial institutions, which will boost confidence in crypto assets.
Bankman-Fried described objections to FTX’s offer in a tweet to Voyager’s most recent court filing. He called it “the ‘please allow us to charge more on the estate’ parade.”
Bankman-Fried added that the bid was motivated primarily by the desire to return customers’ money before it is lost in bankruptcy proceedings.
He wrote, “Well… lots of parties were trying bid $0.10 per dollar for the assets.” A third party could pay $10 to buy $100 from a customer on the platform. The customer would then get $75 and $10 back.
Voyager is asking potential buyers to indicate their interest by Friday to allow it to determine if there are better plans than its current plan.
FTX stated in its proposal that it was fine with the process continuing along with discussions about Voyager’s assets. Voyager could then decide if to sign an agreement based on other offers.
Voyager could change its mind and choose to work with FTX, according to FTX’s initial timeline.