Billionaire Sam Bankman-Fried’s crypto exchange FTX has agreed to take on the assets of broker Voyager Digital after it filed for bankruptcy.
The Bahamas-based firm won an auction of the collapsed firm’s assets with an offer to buy the crypto assets at a fair market value, alongside an additional $111 million, for a total offer of around $1.4 billion (£1.3 billion).
Voyager Digital filed for bankruptcy in July after suspending customer trading, deposits and withdrawals on its platform amid an accelerating Bitcoin sell-off, adding the move was part of a “financial restructuring process,” which, if successful, would allow customers to resume access to their accounts, while those who held crypto in their accounts would be offered shares in the company. The firm had 3.5 million verified users on its platform with total assets of $5.8 billion, according to its most recent quarterly report.
It follows the liquidation of crypto hedge fund Three Arrows Capital after the company failed to repay creditors, including defaulting on a $675 million loan from Voyager.
Voyager Digital CEO Stephen Ehrlich said on Twitter: “We strongly believe in the future of the industry but the prolonged volatility in the crypto markets, and the default of Three Arrows Capital, require us to take this decisive action.”
Voyager earlier snubbed an offer from FTX to purchase its assets, describing the proposal as a “low-ball bid dressed up as a white knight rescue.”
“We submitted what we think is a generous proposal - we aren’t taking fees on this, just letting customers get their remaining assets back promptly,” Bankman-Fried told the Reuters news agency at the time.
Bitcoin prices have plummeted 47% since the start of the year, with one crypto analyst warning of a 2008 financial crash-style “domino effect” as more and more companies teeter on the edge of collapse. At least 10 crypto firms have gone bust of have suspended withdrawals since January.
Bankman-Fried has a wealth of $16.8 billion (£15.8 billion) according to Forbes.
