According to the latest reports (and confirmed via press release), Voyager Digital has officially completed the auction with the power exchange with FTX – the firm that won. Reports in recent weeks have indicated that leading exchange FTX has entered tenders with competitors Binance and CrossTower. All three exchanges are said to be competing with each other to acquire Voyager’s assets.
According to details published by former investment banker Simon Dixon, three exchanges are competing in an auction to acquire Voyager Digital, and each proposes its own terms and conditions for the deal. FTX and Binance each offered about $50 million in cash for Voyager’s assets. This money will be used to make up for the financial shortfall and pay other compensation.
IF THEY WANT YOU TO TAKE THE HIT PUSH FOR EQUITY TO FILL THE HOLE: https://t.co/ThslVDktYY – LATEST ON @investvoyager – 3 Bidders Compete in Voyager Digital Auction With Different Approaches to Platform, Upside, Cash Consideration
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) September 22, 2022
CrossTower, on the other hand, has proposed retaining the existing Voyager platform and app, meaning existing customers don’t need to transition to the new platform once the deal is finalized. Under this plan, customers will also receive their proportional share of assets. CrossTower’s planned acquisition will also cause the exchange to share revenue with Voyager customers for several years.
Dixon also revealed that regulation could play an important role in who wins the auction. The UK’s financial regulator, or FCA, recently warned FTX against operating without permission. Meanwhile, in the United States, the Committee on Foreign Investment may be concerned about allowing Binance to acquire Voyager due to national security risks.
FTX and the successful acquisition of Voyager
FTX has long built a growth-by-acquisition model with a variety of achievements. FTX is currently in the process of working through the acquisition of BlockFi by crypto lender CeFi in an effort to avoid bankruptcy like Celsius. FTX’s U.S. subsidiary is looking to acquire BlockFi and can now add Voyager Digital to its list of new assets to build the FTX Rolodex. While Binance and lesser-known exchange CrossTower are believed to have a stake in the acquisition, FTX is the one making the most attractive bid — despite rumors that Binance’s offer includes a large cash payment.
In recent days there have been rumors swirling around the impending closing of the deal with commentators suggesting that FTX will spend $50 million in cash in anticipation that Voyager’s existing customers be transferred to the FTX platform. The platform requires a share of the coins the debtor owns from existing Voyager accounts. How this plays out remains to be seen. According to the press release, FTX’s winning bid is worth about $1.4 billion.
Where will the deal go?
Voyager Digital filed for Chapter 11 bankruptcy in July, being one of the decentralized finance companies to go bankrupt amid a bear market.
The closing of the deal will allow FTX to complete the acquisition of Voyager’s assets, but the timeline for this remains unclear. For now, Voyager can continue with its bankruptcy filing and seek reconciliation with creditors and former customers to some extent — but certainly not entirely. However, FTX will allow all Voyager assets and customer accounts to operate under their auspices.