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Binance, others line up bids for bankrupt Voyager after FTX collapse

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Voyager said it has roughly $1.3 billion of crypto on its platform and holds over $350 million in money on behalf of shoppers at Latest York’s Metropolitan Industrial Bank.

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Binance and other crypto firms are preparing takeover offers for beleaguered digital currency lender Voyager Digital after FTX, which had initially agreed to accumulate the firm, filed for bankruptcy.

Voyager filed for Chapter 11 bankruptcy protection, which seeks to restructure troubled firms as viable business operations, in July after crypto hedge fund Three Arrows Capital defaulted on a loan from the corporate value $670 million.

Voyager was set to be acquired by FTX’s American unit, FTX U.S., for $1.4 billion after Sam Bankman-Fried’s firm won in a U.S. bankruptcy auction. It was then thrown back to square one after FTX itself filed for bankruptcy after experiencing its own bank run-style surge in withdrawals.

Customers of Voyager have been unable to get their funds out because it paused withdrawals amid an industry-wide liquidity crisis.

This week, Binance confirmed reports that its U.S. subsidiary Binance.US plans to make a suggestion to rescue Voyager from collapse. Binance.US had previously offered to purchase Voyager as a part of its insolvency auction. 

Speaking on Bloomberg, Binance CEO Changpeng Zhao said Binance.US “will make one other bid for Voyager now, given FTX isn’t any longer capable of follow through on that commitment.”

Zhao has also arrange a $1 billion fund aimed toward supporting ailing firms within the industry.

CrossTower, a crypto and NFT trading platform, was among the many parties that originally competed to purchase Voyager within the court auction. The corporate says it plans to make a renewed offer for the corporate — though details are scant for now.

CrossTower is “submitting a revised bid, one it feels will profit each the shoppers and the broader crypto community,” a CrossTower spokesperson told CNBC via email.

CrossTower can also be planning its own separate industry recovery fund. The firm told CNBC it doesn’t view the fund as “competing” with Binance’s.

“That is about stabilizing an industry, regaining trust and rebuilding what’s arguably the long run of finance,” the CrossTower spokesman said.

“We are going to accomplish that, with funds and talent, and we are going to collaborate with governments and policy makers and promote transparency. One enterprise fund didn’t construct the technology industry and one recovery fund is not going to rebuild this one.”

Meanwhile, Wave Financial can also be planning to make a fresh offer to accumulate Voyager, after having initially lost out to FTX, in accordance with a report from London’s Financial News newspaper.

Matteo Perruccio, president of international for Wave, declined to comment on the report when contacted by CNBC via WhatsApp. Last month, Perruccio told CNBC his company “felt that our bid was higher for the investors and the debtors.”

Wave’s bid “saw us reinvigorating VGX,” Voyager’s exchange token, he said within the October interview.

Voyager customers are hopeful that any corporate bailout of the firm will include VGX, a token that was created by Voyager as a type of loyalty rewards program, offering discounts on trading fees.

“We also had some, I feel, pretty clever ideas about methods to bring traffic at a much lower cost of acquisition at the next per customer balance, which were the 2 big problems at Voyager,” Perruccio told CNBC in October.

In August, Voyager paused trading and transfers of VGX and outlined a plan for patrons to swap their tokens for brand spanking new coins on a separate blockchain. The fate of the token, which has fallen over 85% for the reason that start of the yr, stays unclear.

FTX U.S. had offered to purchase all of the VGX held by Voyager and its affiliates for $10 million. But Voyager said it was working to search out a “higher and higher solution” for the token that was compatible with FTX U.S.’ offer. 

FTX U.S. is now a part of bankruptcy proceedings in a Delaware court, together with its parent company and other affiliates including Alameda Research. The corporate’s offer was initially rejected by Voyager, which called it a “low-ball bid dressed up as a white knight rescue.”

One other player involved within the messy restructuring process is Ethos.io, a startup Voyager had acquired in 2019. Voyager only acquired Ethos.io’s technology, and the firm is planning to revive itself as a separate brand after Voyager’s collapse.

Shingo Lavine, co-founder of Ethos.io, says his firm’s technology was core to helping Voyager construct out its crypto capabilities. Voyager saw significant growth after offering support for dogecoin, a meme-inspired digital coin, he added. 

Adam Lavine, Shingo’s father and fellow co-founder of Ethos.io, said the corporate has established its own recovery program for VGX holders and Voyager creditors and has “seen a great response thus far across the Voyager community.”

To this point, “several thousand users representing 10% of the overall VGX market cap” have signed as much as the recovery initiative, the elder Lavine said. Voyager was not immediately available for comment when contacted by CNBC.

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