The bankrupt criptocurrency exchange FTX has made a bid for its assets through its U.S. subsidiary FTX US.
The bid for the two-week auction included a Voyager criptocurrency valued at $1.311 billion at the current market price and additional consideration worth about $111 million in incremental value, according to a Voyager press release.
The winning bid was first reported on Twitter by Liz Hoffman, a former Wall Street Journal reporter whose yet-to be launched media publication has backing from FTX founder and CEO Sam Bankman- Fried. Hoffman said the bid is worth $50 million after stripping away the assets, the bulk of which will be returned to creditors.
The press release stated that FTX US's bid maximizes value and minimizes the remaining duration of the Company's restructuring by providing a clear path forward for the Debtors to complete a chapter 11 plan and return value to their customers and other creditors.
After Chapter 11 case closes, customers will be able to trade and store their assets through the FTX US platform, according to Voyager.
Voyager s own claims on unpaid loans it lent to bankrupt hedge fund Three Arrows Capital will remain part of the bankruptcy estate, which will distribute any recoveries. Voyager lent $650 million to Three Arrows.
After considering both potential sales and standalone reorganization, the debtor firm determined that FTX's offer was the best alternative for Voyager stakeholders.
The auction follows three months of bankruptcy proceedings since the cripto lender filed for Chapter 11 on July 5. In its bankruptcy filing, the company held $1.3 billion in customer assets on its platform, spread across 3.5 million users.
During this time, Bankman-Fried has worked to bail out distressed cryptocurrencies businesses that are facing problems with their cryptocurrencies, as the value of cryptocurrencies plummeted in May and June.
In the beginning of July FTX closed a deal with BlockFi, another financially hurt criptocurrency lender, for up to $680 million, after the firm's Series D funding round stood at $3 billion in March 2021. The deal followed FTX acquisitions of clearing firm Embed and Canada-based trading platform Bitvo.
In late July, FTX and its sister company Alameda Research, which is also majority owned by Bankman-Fried, offered a joint proposal to Voyager Digital to buy its customer assets. Voyager turned down the offer, calling it a low-ball bid that made several false and misleading statements. Voyager paid out $270 million from cash accounts that the court deemed not part of the bankruptcy estate at the beginning of August. Alameda agreed on a $200 million loan borrowed from Voyager before the end of September, which will be returned to Alameda earlier this month.
Neither FTX nor Voyager would offer further comment at press time.
The transaction agreement for FTX will be presented to the United States Bankruptcy Court for the Southern District of New York on Wednesday, October 19, 2022, subject to a creditor vote.
David Hollerith is a senior reporter at Yahoo Finance covering the criptocurrency and stock markets.