Crypto Major FTX Reveals Plan to Allow Voyager Customers to Withdraw Funds Early

The buyout approach from Alameda and FTX appears to have angered Voyager's attorneys, who do not view it as a serious, user-beneficial offer.

In light of a recent bankruptcy filing by a digital asset firm, a cryptocurrency exchange platform with a reputation for aiding the industry has unveiled a plan to rescue the firm’s consumers.

A new press release from crypto exchange behemoth FTX reveals a strategy to give customers of failing crypto brokerage Voyager Digital an option to withdraw funds from their accounts early.

Voyager customers could receive an early distribution on a portion of their bankruptcy claims, allowing them to open a new account with Crypto Major FTX with an initial cash amount. Customers could get their money instantly or invest it in digital assets on the FTX platform.

A significant $650 million loan default by troubled crypto hedge fund Three Arrows Capital was cited as the reason for Voyager’s bankruptcy filing earlier this month.

Sam Bankman-Fried, CEO and creator of FTX, said the plan is meant to help Voyager better deal with its insolvency.

Voyager’s clients “did not opt to be bankruptcy investors holding unsecured claims.

To avoid forcing clients to gamble on bankruptcy outcomes and assume one-sided risks, our joint proposal seeks to provide a more equitable means of winding down a failing crypto business and recouping some of their assets.

Bankman-Fried, who is working to rescue failing companies, has previously said that the general situation of the cryptocurrency market may affect the sector’s attractiveness.

You may make the argument that its popularity is due to the fact that it is good for people’s health. At the end of the day, it’s popularity that counts, although there is some type of trickle-down effect from health here. We need to be a good constructive factor in this place, if that makes any sense.

Voyager Digital Holdings, a centralised cryptocurrency lender, has rejected a purchase bid from FTX and its investment arm Alameda Ventures on the grounds that the move “is not value-maximizing.” “and “harms clients” may be an understatement.

Voyager’s attorneys rejected the offer made public by FTX, FTX US, and Alameda on July 22 to purchase all of Voyager’s assets and outstanding obligations, with the exception of the defaulted loan to 3AC, in a rejection letter filed with the court on July 24.

AlamedaFTX violated various commitments to the Debtors and the Bankruptcy Court, and the letter claims that making such offers public could risk any other prospective deals by subverting “a coordinated, private, competitive bidding process.”

According to Voyager’s representatives, their plan to restructure the company is superior since it guarantees the timely delivery of all cash and the majority of consumers’ cryptocurrency.

Following the default of a $650 million loan by crypto hedge fund Three Arrows Capital (3AC), Voyager filed for bankruptcy in the Southern District of New York on July 5.

Voyager was given a contract on July 22 by the three firms connected to FTX CEO Sam Bankman-Fried, under which Alameda would take over all of Voyager’s assets and FTX or FTX US would sell and distribute them equitably to affected subscribers.

In a news release issued by FTX, Bankman-Fried explained that his solution would allow Voyager users to recoup their losses and leave the site “Customers of Voyager did not volunteer to become bankruptcy investors with unsecured claims. Our united proposal’s end goal is to facilitate a more effective process for winding down a failing crypto firm.
Late on July 24, Bankman-Fried continued a Twitter exchange in which he defended his companies’ proposal to acquire Voyager. Customers of Voyager, he said, have “gone through enough enough” and should have access to their assets as quickly as possible if they so choose, as bankruptcy proceedings “may take years.”

The transaction, which is supposed to compensate Voyager customers, was criticised by their legal team on Sunday for being a “liquidation of Voyager’s assets on a premise that benefits AlamedaFTX.”

It also listed six ways in which the proposal could “harm customers,” such as the potential for capital gains tax consequences, the unfairness of capping the value of each Voyager user’s account at its value on July 5, and the “immediate destruction of over $100 million in value” caused by the elimination of the VGX token.

To put it simply, the AlamedaFTX proposal is a plan to sell off cryptocurrencies in a way that benefits the company itself. It’s a low offer disguised as a heroic rescue.
Additionally, the letter disproved rumours that AlamedaFTX had an advantage in purchase bids because of the companies’ longstanding partnership, writing, “Nothing could be farther from the truth as indicated by this answer.”

Despite the severe bear market, Bankman-Fried has been the subject of numerous purchase discussions. Zac Prince, CEO of rival centralised cryptocurrency lender BlockFi, signed an agreement with FTX on July 1 that would see the company credit $240 million and give BlockFi the opportunity to buy it out for an additional $640 million.

SBF: Crypto winter ending, FTX to make money as lender of last resort.

Bankman-Fried was reportedly looking to raise $400 million for FTX and FTX US on July 20; this would increase their valuation to $32 billion and $8 billion, respectively. The additional fundraising rounds will likely be used to acquire smaller cryptocurrency companies.

Donald M. Ashe

I am Donald M. Ashe, Understanding your needs as a Professional and high-end copywriter, we have developed a full and extensive essay to assist you, as the Online Business Editor.

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