HomeCryptoFTX proposes bailout plan for Voyager Digital customers

FTX proposes bailout plan for Voyager Digital customers

In the wake of Voyager Digital’s declared bankruptcy, FTX is proposing a comeback plan for customers who were burned by the bankruptcy. It is yet another attempt by the exchange to rush to the aid of struggling crypto companies.

FTX designs recovery plan for Voyager customers

Last Friday, the FTX exchange proposed to offer liquidity to customers of cryptocurrency lender Voyager Digital, which went bankrupt.

Voyager Digital had filed for bankruptcy on 6 July, after being caught up in the bankruptcy of Terra first, and then hedge fund Three Arrows Capital, to which Voyager had made a $650 million loan that the fund had failed to repay.

The CEO of Voyager, Stephen Ehrlich, had stated in a note:

“The prolonged volatility and contagion in the crypto markets over the past few months, and the default of Three Arrows Capital on a loan from the company’s subsidiary, Voyager Digital, LLC, require us to take deliberate and decisive action now”.

To overcome its difficulties, Voyager had signed an agreement with the trading company Alameda Ventures, founded by FTX CEO Sam Bankman-Fried, for a revolving line of credit. Alameda, with this line of credit, would be Voyager’s largest single creditor, with unsecured loans of $75 million.

FTX’s big move

Now comes the announcement that FTX would be working with West Realm Shires, to allow Voyager customers to set up new accounts on FTX, with a cash advance guaranteed by the exchange.

Voyager customers who accept the proposed offer would have an opening cash balance funded by FTX and Alameda. This money would be available to them immediately for withdrawal or to be invested to purchase digital currencies on the exchange.

Bankman-Fried, said in a press release:

“The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks”.

FTX also indicated that they will not purchase the loans Voyager made to hedge fund 3AC, which was also declared bankrupt this month.

Vincenzo Cacioppoli
Vincenzo Cacioppoli
Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.