The embattled crypto lender says SBF's deal is bad for its users, but the billionaire disagrees.
Voyager Digital has announced that it's rejected a takeover proposal from FTX — dismissing it as "a low-ball bid dressed up as a white knight rescue."
The crypto lender halted customer withdrawals earlier this month and filed for bankruptcy — vowing to "create an efficient path to resume account access and return value to customers."
Voyager claims that it is currently owed more than $650 million by Three Arrows Capital, a crypto hedge fund that's also embroiled in liquidation proceedings, and has admitted customers may not get all their crypto back.
FTX — the crypto exchange led by Sam Bankman-Fried — has been positioning itself as a company that's prepared to bail out troubled firms, and claims that it has the resources to do so.
In an announcement, FTX said Voyager customers would get the chance to open a new account on its exchange "with an opening cash balance funded by an early distribution or portion of their bankruptcy claims."
The deal would effectively involve FTX and its sister company Alameda Ventures taking on all of Voyager's digital assets and loans (with the exception of the loans given to Three Arrows Capital) in "immediately available cash at fair market value."
But in a new court filing, Voyager Digital has shot back — accusing Alameda and FTX of being "highly misleading" in its public statements about the proposed takeover. Both firms are also accused of attempting to generate publicity instead of working in the interests of Voyager's users.
Kirkland & Ellis, the law firm representing Voyager, wrote in a court filing:
"To anyone who reads the proposal even in a cursory way, it will be obvious that the standalone plan that Voyager filed is capable of delivering far more value to customers than the AlamedaFTX proposal — which transfers significant value to AlamedaFTX, and completely eliminates the value of assets that are of no interest to AlamedaFTX."
Lawyers also point out that the proposal would involve converting each customer's crypto into dollars — with claims paid in USD. This would leave Voyager users "bearing the tax consequences." They go on to claim that the company's VGX tokens would be "effectively eliminated" — destroying $100 million in value "immediately."
Insisting that Voyager is open to "serious" takeover proposals, the company's lawyers went on to write:
"Voyager has already filed a proposed standalone plan that would reorganize the company, return to customers all of their cash and as much of the cryptocurrency they placed on Voyager's platform as possible as promptly as possible, and provide customers upside in both the value of reorganized Voyager and any recovery from Three Arrows Capital."
The filing went on to accuse Alameda and FTX of a "clear and intentional subversion of the bankruptcy process" — potentially damaging customers and creditors — and suggested action could be taken in the future.
SBF Reacts
Sam Bankman-Fried released a Twitter thread — apparently in response to this court filing — to criticize Voyager's handling of its bankruptcy process.
While he acknowledged that some customer funds had been lost after Three Arrows Capital defaulted on loans, he claimed Voyager "still has the majority left," asking:
"Let's say that Voyager has, remaining, 75% of assets (I don't know the exact number). It seems like the first thing that should happen is that customers get back the 75%, and then later get back the rest if anything is recovered from 3AC. But that hasn't happened yet. Why?"
SBF pointed to Mt. Gox as an example of how customers often face a long, protracted process to get their cryptocurrencies back — and claimed that, over this time, "various bankruptcy agents are slowly bleeding the customer's frozen assets dry with consulting fees." This can add up to hundreds of millions of dollars, he said.
The billionaire also claims that customers end up with fewer options.
"See, if a customer had 1 BTC on the platform, and BTC was worth $30k… and then it takes years to go through bankruptcy… what do they get back? 1 BTC, or $30k? Probably, whichever is worth less."
The FTX CEO went on to suggest "a lot of parties" attempting to takeover Voyager are bidding $0.10 on the dollar — meaning customers would only get back $10 for every $100 they had deposited.
He went on to argue that his offer would allow "any customer who wanted to come and get back their share of everything that remained, as soon as possible." Using that same $100 analogy, he claimed users "would get back $75 immediately, and retain their claim in case more was recovered from 3AC."
SBF finished by writing:
"In the end, we think Voyager's customers should have the right to quickly claim their remaining assets if they want, without rent seeking in the middle. They've been through enough already."
