FTX: recovery plan for Voyager Digital app repays 72%

FTX, winner of an interim purchase agreement for the failed Voyager Digital app, would have a recovery plan in hand that would repay 72% of users’ funds. 

FTX and repayment for 72% of user funds from Voyager Digital app

FTX.US and Voyager Digital have reportedly entered into a provisional agreement that includes a recovery plan by which the exchange would refund 72% of the failed company’s user funds. 

In fact, last July, cryptocurrency broker Voyager Digital Holdings filed for bankruptcy, officially filing for what is known as Chapter 11, which is the provision in US bankruptcy law that allows companies a debt restructuring due to severe financial distress. 

Subsequently, FTX proposed to acquire the bankrupt company, as did Binance, Wave Financial, and other companies, and obtained the interim agreement.

In this regard, an FTX spokesperson said:

“We’re excited to receive approval from the bankruptcy court so we can begin working closely with the Voyager team to ensure that funds are made available to customers as soon as legally possible.”

FTX and Voyager Digital: the agreement is still provisional

If FTX.US is confirmed in the deal, it would pay $51 million in cash and transfer Voyager’s customers to its platform. 

This way, investors could be paid in cryptocurrencies if they hold the kind of digital assets supported by FTX.

At the moment, however, the agreement is still provisional. This is happening because US bankruptcy judge Michael E. Wiles has to approve Voyager’s bankruptcy repayment plan, something that is likely to happen by December 2022. 

Wiles also insisted that the bankrupt company must file for “fiduciary out,” the standard bankruptcy clause that allows a company under court protection to consider higher bids before the sale is declared final.

Voyager Digital’s bankruptcy

The cryptocurrency broker, Voyager Digital, went into bankruptcy also due to the bankruptcy of the company Three Arrows Capital or 3AC. 

Basically, in late June, Voyager Digital had placed 3AC’s fund in default by having it declared “bankrupt” by a court in the Virgin Islands. For this, Voyager demanded nonpayment of $25 million on a $350 million loan, declaring the operation in default. 

In its bankruptcy filing, Voyager reported that it had more than 100,000 creditors, with assets valued at about $5 billion. Of this, however, liquid assets appear to be only $110 million. 

FTX’s interest also is contingent on the Alameda company

Another factor to consider for FTX’s interest in acquiring Voyager is that Alameda Research, owned by Bankman-Fried (like FTX), is involved in the bankruptcy. 

In fact, Alameda allegedly borrowed a $377 million sum in cryptocurrencies from Voyager. 

Not only that, Voyager reportedly stated that Alameda had a 9.5% stake in the company. 

For this very reason, Alameda agreed to repay about $200 million in cryptocurrencies it had borrowed in exchange for $160 million in collateral held by Voyager. 

The partnership with payments giant Visa

Recently, FTX has also been in the news for its new collaboration with global payments giant Visa to offer new crypto cards in 40 countries. 

Such Visa crypto debit cards are already available in the US and are linked directly to the user’s FTX cryptocurrency investment account. 

In practice, US users can already make their purchases by spending digital currencies, without moving them from the exchange, just as they would with any bank account.