Voyager Digital has sold its assets at auction due to bankruptcy and it has been announced that FTX US has been awarded the deal. It has been reported that the stock exchange giant has secured victory against digital asset investment company Wave Financial.
FTX US, founded by Sam Bankman-Fried, is buying Voyager Digital’s assets for $1.4 billion and the deal was announced earlier this week. According to CNBC, the bankruptcy auction lasted several bidding rounds before FTX’s American entity was selected as the winning bidder.
The successful $1.4 billion bid includes the $1.3 billion fair market value of Voyager cryptocurrency plus an additional consideration of $111 million in incremental value.
It was in July of this year that Voyager Digital filed for Chapter 11 bankruptcy after a chaotic fall in digital currency prices. With the situation, the company was unable to pay out withdrawals from its customers, which eventually led to bankruptcy.
On the other hand, it wasn’t all due to the price drop, but part of the company’s failure was also due to the collapse of Three Arrows Capital, a Singapore-based cryptocurrency hedge fund
collecting loans from other organizations like Voyager to take risky bets on tokens like the previously crashed stablecoin TerraUSD.
The hedge fund was ordered into liquidation by a court in the British Virgin Islands at the end of June. The company also defaulted on its $670 million in loans from Voyager Digital.
Meanwhile, Voyager is now working on its restructuring process and hinted at the possibility of its customers switching to FTX US. The asset purchase agreement between the companies is scheduled to go before the US Bankruptcy Court for the Southern District of New York on October 19 for approval.
“We conducted a rigorous marketing process and contacted over 90 prospects to determine interest in a potential sale,” Voyager said in a blog post about the auction’s conduct. “We also proposed a standalone reorganization plan and used the plan as a basis for negotiations with potential buyers. The subsequent auction, which lasted several weeks, was competitive and included several bidding rounds from several interested parties.”
The crypto firm also assured everyone that the Uniform Commercial Code (UCC) actively participated in the fierce auction. She added that the financial contracts regulator supported FTX US’s successful offering.