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FTX draws up plans to aid Voyager users access liquidity

FTX
TL;DR Breakdown
  • FTX offers a plan to return some of the assets in Voyager Digital’s digital clients’ hands early.
  • FTX has been working to assist beleaguered cryptocurrency firms to get back on their feet.
  • Bankman-Fried plans to take over South Korea’s Bithumb.

Voyager Digital, which is currently undergoing bankruptcy proceedings, may resume withdrawals in collaboration with FTX if it continues its restructuring process. In a joint suggestion to Voyager Digital, FTX Trading Ltd has proposed allowing clients to receive early liquidity through FTX and recover part of their funds.

FTX and Alameda Ventures want to give Voyager Digital clients the option of signing up for a new FTX account. This will necessitate an initial cash balance paid for by a preliminary distribution of their bankruptcy claims. The crypto exchange said in a statement that they plan to assist crypto firms affected by the crypto winter.

Alameda Ventures plans to acquire all Voyager digital assets and digital asset loans if it is granted control of Voyager. However, Alameda will not accept 3AC-oriented loan repayments (3AC). Clients have the option of withdrawing their money immediately or investing it in crypto assets on FTX. However, this proposal is optional, so customers can choose not to participate.

FTX – Voyagers` knight in shining armor

The money from the 3AC debt would be used to refund customers. Accepting the deal would safeguard Voyager Digital’s existing crypto assets from depreciation since they wouldn’t have access to them. This will be paid out as a result of their digital assets’ value on July 5.

Sam Bankman-Fried confirmed the joint proposal, saying that Voyager’s customers did not choose to be bankruptcy investors holding unsecured claims. After establishing an FX account, Voyager Digital’s clients will be able to continue trading their cryptocurrency or withdrawing their money immediately. Sam Bankman-Fried, co-founder and CEO of FTX, added:

The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business — a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks.

Sam Bankman-Fried

FTX would acquire all of Voyager Digital’s customers’ information in addition to purchasing the company’s digital assets and loan obligations at market value. Apart from that, for a payment of $15 million, FTX would acquire all its customer information, trademarks, and other intellectual property. In addition, FTX would also write off its $75 million loan claim against Voyager Digital.

Voyager contemplates in silence

The trustee wants Voyager Digital to respond by Tuesday with an eye on receiving quick authorization from the bankruptcy court and closing the transaction by August 17. Voyager Digital would still reimburse the funding expense of the 3AC, and its clients would get independent reimbursement outside of their relationships with FTX.

Meanwhile, Voyager has yet to accept the offer. FTX provided a July 26 deadline for response, and it aims to finalize the transaction soon. Even if Voyager agrees, there will be more procedures to go through, including more court procedures.

On July 1, the exchange announced that it would suspend withdrawals. A few days later, Voyager filed for bankruptcy. However, the business has also provided updates on its restructuring process. According to Voyager, the next court hearing is scheduled for August 4.

The court order is still pending, but the bankruptcy trustee asked for it in a recent filing. It added that it is working to obtain court approval so those who deposited USD may retrieve their money. The lender said all USD deposits are held at Metropolitan Commercial Bank (MCB).

Bankman-Fried intends to take over South Korea’s Bithumb.

FTX is joining the Binance ranks, determined to survive and prosper through the crypto winter. Both platforms have seized a global cryptocurrency leadership as other firms sink. FTX is in advanced talks to buy South Korea’s Bithumb. A person with knowledge of the matter said the companies have been in discussions for several months.

However, a Bithumb representative stated they cannot comment at this time. A spokesperson for FTX likewise declined to comment. Bankman-Fried is taking advantage of the crypto market downturn by propping up or acquiring incapacitated firms.

Bankman-Fried’s firm and its US investments arm are in talks to raise fresh capital, according to sources familiar with the matter. This puts Bankman-Fried in a position to continue his deal spree, which has seen him commit more than $1 billion so far.

According to data provider CoinGecko, Bithumb, launched in 2014, handles around $569 million in trades daily on average. It was one of several South Korean crypto exchanges where investigators searched this week as part of an expanding probe into Terraform Laboratories following the May failure of the TerraUSD stablecoin.

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Florence Muchai

Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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