By
Steve Muchoki
May 10th, 2024
The publicly traded crypto platform, Voyager intends to auction off its assets as part of the bankruptcy process.
Voyager Digital will auction its remaining assets on September 13 as it moves through the Chapter 11 bankruptcy process. Voyager’s asset auction will occur at the New York offices of its investment bankers, Moelis & Company.
According to a Tuesday court filing, the deadline for submitting bids was September 6. After the court’s approval, expected on September 29, Voyager’s auction results will become final. In early August, Voyager’s company lawyers said at least 22 investors had shown interest in the company’s assets bid. However, the lawyers’ presentation did not specify the number of formal bids received before the deadline.
FTX and Binance are two major crypto players rumored to have indicated an interest in bidding for Voyager’s assets. Last week, in an interview with the New York Times, Binance CEO Changpeng Zhao confirmed the speculation. He said two bankrupt crypto lenders, Voyager and Celsius Network, approached his company to discuss selling their assets. Zhao said that the Binance team is engaging in all of those conversations. According to a Binance spokesperson:
“We have a policy to only disclose deals after they are complete and cannot confirm or deny any potential deals.”
FTX to Help Voyager
Soon after Voyager filed for Chapter 11 bankruptcy, crypto trading platform FTX announced its joint proposal with West Realm Shires. FTX’s combined proposal with the US-based company West Realm will enable Voyager’s customers to create new accounts on FTX. West Realm Shires owns FTX.US and Venture capital firm Alameda Ventures, a company managed by FTX CEO Sam Bankman-Fried. According to Sam:
“The goal of the 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.”
However, lawyers representing Voyager Digital rejected the joint proposal by FTX and West Realm Shires. The representatives called the proposal a low-ball bid dressed up as a white knight rescue that only benefits FTX. The lawyers alleged that the plan would transfer significant value to AlamedaFTX. Additionally, they argued that the plan would cancel the value of assets that do not interest AlamedaFTX.
Cryptocurrency exchange Coinbase was also in the bidding picture by potentially partnering with Washington DC-based Callaway Capital Management. According to reports, the US-based exchange withdrew its bid after concluding that the financials did not add up. Coinbase and Callaway both declined to comment on the speculation.
Voyager Facing Allegations in Addition to Required Auction
Voyager CEO Stephen Erlich and Dallas Mavericks owner Mark Cuban are facing an allegation accusing them of taking advantage of inexperienced investors. A group of Voyager investors filed a lawsuit against the two men. However, Voyager lawyers believe the firm is free from temporary lawsuits with a bankruptcy filing. The lawyers also argue that this immunity should extend to the bigwigs in the company.
As part of Voyager’s quest to recovery, the company recently issued a default notice to Three Arrows Capital (3AC). Voyager accused the Singapore-based crypto hedge fund 3AC of failing to pay back a loan of over $670 million. According to the notice, Voyager loaned 3AC over $350 million USDC and 15,250 BTC (approximately $324 million).
During the auction announcement, Voyager said customers would recover their assets after the completion of the auction process. Customers must review their Voyager’s record of indebted assets. Notably, October 3, 2022, is the deadline for customers with disputes to submit their proof of claim for resolution.