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Voyager Says FTX’s Buyout Supply Was Deceptive “Low-Ball Bid,” SBF Fires Again

Key Takeaways

  • Voyager’s chapter legal professionals have responded to FTX’s buyout proposal to buy the trade’s property and provides prospects on the spot liquidity by describing the supply as dangerous and extremely deceptive.
  • Sam-Bankman Fried responded by saying that the legal professionals are solely in opposition to the liquidation proposal as a result of they need to drain Voyager’s remaining funds by charging charges.
  • Voyager filed for Chapter 11 chapter on July 6 after the notorious crypto hedge fund Three Arrows Capital hurled the trade into an insolvency disaster by defaulting on a $665 million mortgage.

Commenting on Voyager’s response to the proposal, FTX founder and CEO Sam-Bankman Fried stated that solely the chapter legal professionals would profit from dragging out the proceedings, whereas the purchasers would “get fucked.”

Voyager Lawers Slam FTX’s Buyout Supply

Voyager Digital’s legal professionals and FTX’s Sam-Bankman Fried have entered a public spat over Voyager’s chapter.

In a Sunday courtroom submitting, the legal professionals representing the bankrupt cryptocurrency trade Voyager Digital responded to a buyout proposal by the fairness holder and rival agency FTX to supply on the spot liquidity to Voyager prospects by calling it “extremely deceptive” and dangerous. “The AlamedaFTX proposal is nothing greater than a liquidation of cryptocurrency on a foundation that benefits AlamedaFTX,” Voyager’s response learn. “It’s a low-ball bid dressed up as a white knight rescue.”

In a press launch printed July 22, FTX supplied Voyager a deal that might see Alameda Analysis buy all of Voyager’s crypto property and loans—excluding loans to the bankrupt crypto hedge fund Three Arrows Capital—and use them to supply on the spot liquidity to prospects affected by the chapter. Per the buyout proposal, Voyager prospects would be capable of open FTX accounts and withdraw their share of the remaining property in money whereas retaining their rights and claims within the proceedings. Based on FTX, this could give Voyager prospects an opportunity to right away obtain some liquidity and decide out of a chapter continuing that might drag on for years and expose them to dangers.

Nevertheless, in yesterday’s response to the proposal, Voyager’s chapter legal professionals stated that FTX’s proposal was designed to generate publicity for itself quite than worth for the trade’s prospects. “By making its Proposal publicly in a press launch laden with deceptive or outright false claims, AlamedaFTX violated many obligations to the Debtors and the Chapter Court docket,” the reply learn, additional outlining a listing of explanation why the proposal “harms prospects” whereas benefiting FTX.

Commenting on Voyager’s response to the buyout proposal on Twitter Monday, FTX founder and CEO Sam-Bankman Fried stated that the one celebration standing to profit from stretching the chapter proceedings can be Voyager’s legal professionals—not its prospects.

3) Effectively, the *conventional* course of is that earlier than prospects get their property again, they get fucked.

First, there is a lengthy, drawn out course of, throughout which funds are frozen. It will probably take years.

Keep in mind Mt. Gox? That course of is *nonetheless happening*.

— SBF (@SBF_FTX) July 25, 2022

“Effectively, the *conventional* course of is that earlier than prospects get their property again, they get fucked,” he stated. Versus simple liquidation, a restructuring course of might final and preserve prospects’ funds frozen for years. Within the meantime, he stated, numerous chapter brokers would bleed the purchasers dry with consulting charges, which might finally tally as much as thousands and thousands of {dollars} in prices by the point the process is finished. “The consultants, for example, seemingly need the chapter course of to pull out so long as attainable, maximizing their charges. Our supply would let folks declare property rapidly,” he concluded.

Voyager filed for a Chapter 11—a sort of voluntary chapter continuing that enables the corporate to restructure and preserve working with a purpose to finally settle its obligations—on July 6, after Three Arrows Capital defaulted on a $665 million mortgage from the trade. Three Arrows’ blowup created a ripple of liquidity crises and insolvencies all through the business, severely hurting firms like Celsius, blockchain.com, and the Digital Foreign money Group.

Disclosure: On the time of writing, the writer of this piece owned ETH and a number of other different cryptocurrencies.

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