The Biz Journals

FTX is paying $51 million in cash for Voyager assets, court records show

Author:

Published:

Updated:

Affiliate Disclaimer

As an affiliate, we may earn a commission from qualifying purchases. We get commissions for purchases made through links on this website from Amazon and other third parties.

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022.

Jeenah Moon | Bloomberg | Getty Images

Sam Bankman-Fried, FTX’s founder, has pursued an aggressive buying spree across the crypto industry, snapping up deeply discounted assets in the wake of defaults, bankruptcies, and market tumult.

In the Voyager deal, FTX’s consideration for non-crypto assets — the users, intellectual property, and structure of Voyager itself — constitutes a total of “at least $111 million,” filings show. Just $51 million of that is for Voyager’s assets, intellectual property, and user base. The remaining $60 million consists of an accumulated $50 account credit for each Voyager user who successfully onboards with FTX and a $20 million “earn out” allowance.

It was not immediately apparent, based on filings, who would benefit from an earnout, which is often used in acquisitions as a way to incentivize founders and management teams of the company being purchased.

Voyager’s most recent bankruptcy report indicated that the company held just shy of $900 million in crypto assets for customers, with another $456.44 million loaned out and $173.68 million held as collateral from borrowers.

Voyager users who chose to migrate to FTX’s platform would receive a pro rata distribution of Voyager assets, based on their portion of Voyager’s overall holdings.

Voyager’s troubles emerged after the firm extended a loan valued at $670 million to crypto hedge fund Three Arrows Capital (3AC) in early 2022. When 3AC defaulted on its loan obligations in late June, it unleashed a financial cascade that pushed Voyager into bankruptcy and 3AC’s founders into hiding.

FTX’s bid, if approved by creditors, would transfer Voyager’s loan balances — excluding the 3AC loan, which was not part of the deal — to FTX and, by extension, to Bankman-Fried. The $51 million price tag for Voyager and its associated claims would represent a steep discount, given FTX’s assumption of customer assets and loan balances.

Source link

About the author

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest posts

  • Eight states file enforcement action against crypto lending platform Nexo

    Eight states file enforcement action against crypto lending platform Nexo

    New York State Attorney General Letitia James speaks at a news conference after former U.S. President Donald Trump’s White House chief strategist Steve Bannon arrived to surrender, in New York, U.S., September 8, 2022. Caitlin Ochs | Reuters Eight states announced on Monday they’re bringing actions against the crypto lending platform Nexo Group in connection…

    Read more

  • Facebook takes down political influence operations from China and Russia

    Facebook takes down political influence operations from China and Russia

    Facebook parent company Meta said it took down two unconnected networks of accounts based in China and Russia seeking to influence political narratives in the U.S. and Europe. The platform regularly searches for and removes accounts it believes to have violated its policy against coordinated inauthentic behavior. Such activity became a flashpoint in the U.S. after the 2016 presidential…

    Read more