Voyager says it has about $1.3 billion in crypto on its platform and holds more than $350 million in cash on behalf of customers at New York’s Metropolitan Commercial Bank.
Justin Sullivan | Getty’s image
Binance and other crypto firms are preparing a takeover bid for beleaguered digital currency lender Voyager Digital after FTX, which originally agreed to acquire the company, filed for bankruptcy.
Voyager filed for Chapter 11 bankruptcy protection, which seeks to restructure a troubled company as a viable business operation, in July after crypto hedge fund Three Arrows Capital defaulted on a $670 million loan from the company.
Voyager will be acquired by FTX’s American unit, FTX US, for $1.4 billion after Sam Bankman-Fried’s company wins in a US bankruptcy auction. It was then thrown back to square one after FTX itself filed for bankruptcy after experiencing a spike in its own bank style withdrawals.
Voyager customers have been unable to withdraw their funds since halting withdrawals amid an industry-wide liquidity crunch.
This week, Binance confirmed reports that its US subsidiary Binance.US plans to make a bid to save Voyager from collapse. Binance.US had previously offered to buy Voyager as part of its bankruptcy auction.
Speaking on Bloomberg, Binance CEO Changpeng Zhao said Binance.US “will be making another offer for Voyager now, given that FTX will no longer be able to follow through on that commitment.”
Zhao has also set up a $1 billion fund aimed at supporting ailing companies in the industry.
CrossTower, a crypto trading platform and NFT, was one of the parties that initially competed to buy Voyager at a court auction. The company says it plans to create a new offering for enterprise – though details are lacking at this point.
CrossTower “is submitting a revised offer, which we feel will benefit customers and the wider crypto community,” a spokesperson for CrossTower told CNBC via email.
CrossTower is also planning its own separate industrial recovery fund. The company told CNBC that they do not view the fund as “competitive” with Binance’s.
“This is about stabilizing the industry, regaining confidence and rebuilding the financial future,” said a spokesperson for CrossTower.
“We’re going to do it, with funding and talent, and we’re going to work with governments and policy makers and promote transparency. One venture fund isn’t building the tech industry and one recovery fund isn’t going to rebuild this one.”
Meanwhile, Wave Financial is also planning to make a new bid to acquire Voyager, having initially lost to FTX, according to a report from London’s Financial News newspaper.
Matteo Perruccio, international president for Wave, declined to comment on the report when contacted by CNBC via WhatsApp. Last month, Perruccio told CNBC that his company “feels our offer is better for investors and debtors.”
The Wave offering “saw us resurrecting VGX,” the Voyager exchange token, he said in an October interview.
Voyager customers expect any corporate bailout from the company to include VGX, a token created by Voyager as a kind of loyalty rewards program, which offers discounts on trading fees.
“I think we also had some pretty smart ideas about how to bring in traffic at a much lower acquisition cost with a higher balance per subscriber, which were two of the big issues at Voyager,” Perruccio told CNBC in October.
In August, Voyager suspended VGX trading and transfers and outlined plans for customers to exchange their tokens for new coins on a separate blockchain. The fate of the token, which has fallen more than 85% since the start of the year, remains unclear.
FTX US has offered to buy all VGX held by Voyager and its affiliates for $10 million. But Voyager said it was working to find “higher and better solutions” for tokens that are compatible with the FTX US offering.
FTX US is now part of bankruptcy proceedings in a Delaware court, along with its parent company and other affiliates including Alameda Research. The company’s offer was initially rejected by Voyager, who called it a “low bid dressed up as the savior of the white knight”.
Another player involved in the messy restructuring process is Ethos.io, a startup that Voyager acquired in 2019. Voyager only acquired Ethos.io’s technology, and the company plans to revive itself as a separate brand after Voyager collapses.
Shingo Lavine, co-founder of Ethos.io, says his company’s technology is core to helping Voyager build its crypto capabilities. Voyager saw significant growth after offering support for dogecoin, a meme-inspired digital coin, he added.
Adam Lavine, Shingo’s father and co-founder of Ethos.io, said the company has created its own recovery program for VGX holders and Voyager creditors and has “seen a good response so far in the Voyager community.”
So far, “several thousand users representing 10% of VGX’s total market cap” have signed up to the recovery initiative, said the elder Lavine. Voyager was not immediately available for comment when contacted by CNBC.