Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during an interview on an episode of Bloomberg Wealth with David Rubenstein in Latest York, US, on Wednesday, Aug 17, 2022.
Jeenah Moon | Bloomberg | Getty Images
Sam Bankman-Fried, FTX’s founder, has pursued an aggressive buying spree across the crypto industry, snapping up deeply discounted assets within the wake of defaults, bankruptcies, and market tumult.
Within the Voyager deal, FTX’s consideration for non-crypto assets — the users, mental property, and structure of Voyager itself — constitutes a complete of “not less than $111 million,” filings show. Just $51 million of that’s for Voyager’s assets, mental property, and user base. The remaining $60 million consists of an collected $50 account credit for every Voyager user who successfully onboards with FTX and a $20 million “earn out” allowance.
It was not immediately apparent, based on filings, who would profit from an earnout, which is commonly utilized in acquisitions as a method to incentivize founders and management teams of the corporate being purchased.
Voyager’s most up-to-date bankruptcy report indicated that the corporate held just shy of $900 million in crypto assets for purchasers, with one other $456.44 million loaned out and $173.68 million held as collateral from borrowers.
Voyager users who selected to migrate to FTX’s platform would receive a professional rata distribution of Voyager assets, based on their portion of Voyager’s overall holdings.
Voyager’s troubles emerged after the firm prolonged a loan valued at $670 million to crypto hedge fund Three Arrows Capital (3AC) in early 2022. When 3AC defaulted on its loan obligations in late June, it unleashed a financial cascade that pushed Voyager out of business and 3AC’s founders into hiding.
FTX’s bid, if approved by creditors, would transfer Voyager’s loan balances — excluding the 3AC loan, which was not a part of the deal — to FTX and, by extension, to Bankman-Fried. The $51 million price tag for Voyager and its associated claims would represent a steep discount, given FTX’s assumption of customer assets and loan balances.
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