Binance and others offer bankrupt Voyager deals after FTX collapse

Voyager said it has about $1.3 billion worth of crypto on its platform and over $350 million in cash on behalf of clients at New York’s Metropolitan Commercial Bank.

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Binance and other crypto firms are preparing takeover bids for struggling digital currency lender Voyager Digital after FTX, which originally agreed to acquire the firm, filed for bankruptcy.

Voyager filed for Chapter 11 bankruptcy protection aimed at turning ailing companies into viable businesses in July after crypto hedge fund Three Arrows Capital defaulted on a $670 million loan from the company.

Voyager was set to be acquired by FTX’s American unit, FTX US, for $1.4 billion after Sam Bankman-Fried’s firm won a US bankruptcy auction. It was then relegated to first place after FTX itself filed for bankruptcy after experiencing a spike in bank run-style withdrawals.

Voyager customers were unable to withdraw their funds as the company suspended withdrawals amid an industry-wide liquidity crisis.

This week, Binance confirmed reports that its US subsidiary, Binance.US, plans to make a bid to save Voyager from collapsing. Binance.US previously offered to buy Voyager in its bankruptcy auction.

Speaking on Bloomberg, Binance CEO Changpeng Zhao said Binance.US “will now make another bid for Voyager as FTX is no longer able to honor this commitment.”

Zhao has also set up a $1 billion fund aimed at helping struggling companies in the industry.

CrossTower, a crypto and NFT trading platform, was among the parties originally competing to buy Voyager in the court auction. The company says it plans to make a re-offer for the company – although details are sparse for now.

CrossTower “is submitting a revised offer that it believes will benefit both customers and the broader crypto community,” a CrossTower spokesperson told CNBC via email.

CrossTower is also planning its own industrial recovery fund. The firm told CNBC that it doesn’t see the fund as “competition” to Binance.

“This is about stabilizing an industry, regaining trust and rebuilding what arguably is the future of finance,” said the CrossTower spokesman.

“We will do this, with funds and talent, and we will work with governments and policymakers and promote transparency. A venture fund didn’t build the tech industry, and a recovery fund won’t build it again.”

Meanwhile, Wave Financial plans to launch a new bid to acquire Voyager after initially losing to FTX, according to a report by London-based newspaper Financial News.

Crypto is facing a crisis of investor confidence

Matteo Perruccio, President of International for Wave, declined to comment on the report when contacted by CNBC via WhatsApp. Perruccio told CNBC last month that his company “believes that what we offer is better for the investors and the debtors.”

Wave’s offering “saw us reinvigorating VGX, Voyager’s exchange token,” he said in the October interview.

Voyager’s customers hope that any corporate bailout of the company will include VGX, a token developed by Voyager as a sort of loyalty rewards program, offering discounts on trading fees.

“We also had some, I think, pretty clever ideas about how to get traffic to a higher balance per customer at a much lower initial cost, which were the two big problems with Voyager,” Perruccio told CNBC in October.

In August, Voyager paused trading and transmission of VGX and outlined a plan for customers to exchange their tokens for new coins on a separate blockchain. The fate of the token, which is down over 85% year-to-date, remains unclear.

FTX US had offered to buy all VGX held by Voyager and its subsidiaries for $10 million. But Voyager said it is working to find a “higher and better solution” for the token that is compatible with FTX US’s offering.

FTX US is now in bankruptcy proceedings in a Delaware court along with its parent company and other affiliates, including Alameda Research. The company’s bid was initially rejected by Voyager, which described it as a “low-ball bid in the guise of saving a white knight.”

Another player involved in the messy restructuring process is Ethos.io, a startup that Voyager acquired in 2019. Voyager only inherited Ethos.io’s technology, and the company plans to revive itself as a standalone brand after Voyager collapsed.

Shingo Lavine, co-founder of Ethos.io, says his company’s technology was the core to help Voyager expand its crypto capabilities. Voyager saw significant growth after supporting Dogecoin, a meme-inspired digital coin, he added.

Adam Lavine, Shingo’s father and co-founder of Ethos.io, said the company has set up its own recovery program for VGX holders and Voyager creditors and “so far has had a good response from the entire Voyager community.”

So far, “several thousand users, representing 10% of the total VGX market cap” have joined the recovery initiative, the elder Lavine said. Voyager was not immediately available for comment when contacted by CNBC.

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