NEW YORK: Bankrupt crypt exchange FTX sued Voyager Digital on Monday, seeking to claw back $445.8 million in loan repayments that FTX made before it went into bankruptcy in November 2022.
FTX and Voyager both filed for bankruptcy in 2022, but Voyager s bankruptcy preceded FTX's filing by four months.
After Voyager filed in July, it demanded repayment of all outstanding loans to FTX and its affiliate hedge fund Alameda Research.
FTX said in a court filing that it paid Voyager $248.8 million in September and $193.9 million in October. FTX made a $3.2 million interest payment in August, according to its court filings.
Because the loan payments were made so close to FTX's bankruptcy filing, they are eligible to be clawed back and possibly used to repay other FTX creditors, according to FTX's complaint.
FTX, once one of the world's top criptocurrencies exchanges, shook the sector in November by filing for bankruptcy, leaving 9 million customers and other investors with losses in the billions of dollars.
Sam Bankman-Fried, founder of Alameda Research CEO Caroline Ellison, has been indicted on fraud charges and several top executives have pleaded guilty to fraud. Bankman- Fried has denied wrongdoing and is scheduled to appear in court in October.
FTX initially appeared to be a white knight that could stabilize the reeling cryptocurrencies markets after the storm that brought down Voyager and other crypto firms in summer 2022. FTX offered to buy Voyager's platform in a bankruptcy auction, but the proposed acquisition fell apart when FTX went off in November.
In its Monday court filing, FTX acknowledged the allegations that Alameda raided FTX customer assets to cover its risky borrowing and lending. Voyager and other criptocurrencies were complicit in Alameda's conduct, knowingly or recklessly pushing their clients' assets toward Alameda, it said.
FTX said that the business model of the Voyager was that of a feeder fund. It sought retail investors and invested their money with little or no due diligence in cryptocurrencies investment funds like Alameda and Three Arrows Capital. Three Arrows Capital went bankrupt in 2022, and its founders refused to cooperate with court-appointed liquidators who are trying to recover assets for Three Arrows customers.