The attorneys for insolvent cryptocurrency lender Voyager Digital have called the proposal by FTX to provide early liquidity only a “low-ball bid dressed up as white knight rescue." They say that this will only benefit them and not the creditors.
In court documents filed on Sunday, attorneys for Voyager said that Bankman-FTX Fried’s proposal and Alameda Research trading company's exchange were self-serving. The businesses are accused of undermining the bankruptcy process by their actions in this matter.
In a surprising move, Sam Bankman-Fried offered his reorganization plan for Voyager, which prompted an answer from the company. The proposed solution requires court approval but would call on Alamada to purchase all digital assets and loans aside from those owed by Three Arrows Capital. At the same time, FTX enables clients with claims against them to create accounts through its services.
Furthermore, Voyager's lawyers stated that the company is open to any "serious proposal" for acquisition but that Bankman-offer Fried's was "designed to generate publicity for itself rather than value for Voyager's customers."
"AlamedaFTX essentially proposes a liquidation in which FTX serves as liquidator." Voyager's cryptocurrency assets and loans are still being negotiated with AlamedaFTX.
Criticism has called into question the ability of Bankman-bid Fried’s company, Voyager Capital's assets after it was reported that they were providing rescue solutions to businesses hit by falls in digital currencies. The request was made through one such solution -a lender who provided users with high rates on deposits and withdrawals when using their platform, allowing people access earlier in July; this came just days before applying for bankruptcy.
According to court documents, Voyager owed $1.1 billion in debt liabilities, including $654 million from Three Arrows, which had also declared bankruptcy. These obligations included those resulting from the demise of the digital tokens Terra and Luna. Voyager suspended all trading and withdrawal operations on its platform on July 1 as meeting consumer withdrawal demands became more difficult.
Voyager's lawyers had already informed the federal bankruptcy court in New York that they intended to propose a separate reorganization and sale procedure. On Friday, Voyager reported that approximately 40 prospective buyers had signed NDAs to begin the due diligence process. It has proposed holding an auction three days after the bid deadline of August 26.
Sam Bankman-Fried Responds
On Twitter, Bankman-Fried questioned Voyager's delay in returning the last of the customers' deposits. He stated that under the standard bankruptcy procedure, Voyager's client assets would be impounded for an indefinite period of time.
He questioned the motivations of bankruptcy lawyers, who typically drain their clients' assets while charging fees.
"The consultants, for example, are likely to want the bankruptcy process to last as long as possible to maximize their fees." "Our offer would allow people to claim assets quickly," he explained. "Our offer would return Voyager customers 100 percent of Voyager's remaining assets, including claims on anything recovered in the future."
Voyager previously announced a restructuring plan in which platform users who own cryptocurrency will receive a mix of their cryptocurrency, money from any Three Arrows recovery, common stock in the newly reorganized business, and Voyager's tokens VGX. Some customers have expressed reservations about the approach.