Crypto: Customers of bankrupt lender may soon get their money back


This is an unusual offer.

But it’s a proposition that should reassure customers of bankrupt crypto lender Voyager Digital.

The latter had indeed lost all hope of being able to recover their assets/funds after the crypto lender, victim of the default of the hedge fund Three Arrows Capital, or 3AC, on a loan, filed for Chapter 11 bankruptcy earlier this month. .

According to official Voyager Digital documents, retail investors are not at the top of the list of secured creditors. Their debts are considered unsecured, which means that they are not certain that they will ever be able to recover their money.

But an unusual event has just occurred. The young crypto billionaire Sam Bankman-Fried, founder of the crypto exchange, proposes a restructuring plan whose objective is to allow Voyager Digital customers to recover some of their funds. The merit of this proposal is that it will attract these customers to at the same time.

Early access to their liquidity

Indeed, the offer is in two parts. Alameda, a trading company owned by Bankman-Fried, would buy all of Voyager Digital’s assets in cash, including loans, except those made to failing hedge fund 3AC.

Meanwhile, FTX, Bankman-Fried’s cryptocurrency trading platform, is reportedly offering Voyager Digital customers the option to receive their money sooner by opening an account on FTX. Any Voyager Digital customer who does not wish to open an account on FTX retains their rights in the bankruptcy proceedings, but will not receive advance cash on their claims through FTX.

The offer is non-binding and has not yet been accepted by Voyager Digital.

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“Under the joint proposal, Voyager customers would have the option of opening a new account with FTX with an opening cash balance funded by an early distribution on a portion of their bankrupt claims,” FTX explains in a recent press release you can find here.

“Clients could withdraw their money immediately or use it to purchase digital assets on the FTX platform. No client is required to participate and participation in the joint proposal is entirely voluntary,” the company adds.

Alameda had already extended a $75 million line of credit to Voyager Digital before the company filed for bankruptcy. As part of the new offer, Alameda will erase this claim.

It is a kind of win-win formula because the offer gives a positive and saving image to Bankman-Fried and FTX, which will also allow him to gain new customers. The offer is also ideal advertising for FTX at a time when distrust of the cryptocurrency industry is returning. They will be considered the “good guys”.

Bankman-Fried Power continues to grow

“Voyager clients have not chosen to be bankrupt investors with unsecured debt,” said Sam Bankman-Fried, CEO of FTX. “The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – one that allows clients to quickly get cash and recover some of their assets without forcing them to speculate. on the results of the bankruptcy and to take unilateral decisions. risks.”

Since the onset of the current liquidity crunch in the crypto industry, Bankman-Fried has emerged as the new saviour, much like JPMorgan Chase Bank during the 2008 financial crisis. power by bailing out on crypto lender BlockFi, which gave it an option to acquire the platform. FTX is in talks to buy Bithumb, a South Korean cryptocurrency exchange.

Bankman-Fried also became one of Robinhood’s major shareholders. And the young 30-year-old billionaire does not intend to stop there. He wants to continue to extend his power over an industry that likes to present itself as decentralized in opposition to the traditional financial system.

“We could definitely see ourselves spending hundreds of millions beyond what we have so far, and in some cases more than that,” Bankman-Fried told CNBC on July 22.

To fund its ambitions, FTX is in discussions to raise new funds, according to Bloomberg News.


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