FTX, a cryptocurrency trading platform, intends to provide early liquidity to customers of the bankrupt crypto lender Voyager Digital.
The joint proposal comes just two weeks after Voyager declared bankruptcy under Chapter 11. Voyager previously received a $200 million loan in cash/USDC and 15,000 bitcoins from Alameda Ventures, a company controlled by FTX CEO Sam Bankman-Fried.
FTX is collaborating with West Realm Shires, the company that owns FTX.US, and Alameda Ventures to allow Voyager customers to open new accounts on FTX, according to a press release issued by the crypto exchange on Friday.
Customers who accept the offer will receive an opening cash balance funded by an early distribution on a portion of their bankruptcy claims, according to FTX. They would be able to withdraw the money right away or use it to buy digital assets on FTX. Customers of Voyager will not be required to participate in the plan.
The goal of our joint proposal is to assist in the establishment of a better way to resolve an insolvent crypto business – a way that enables customers to acquire early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks, Bankman-Fried stated in a press release.
As part of the plan, FTX also stated that it will not purchase Voyager’s loans to hedge fund Three Arrows Capital, which also filed for bankruptcy this month. And FTX anticipates that any loan recoveries will be used to fund supplemental distributions to Voyager customers, regardless of whether they opened an account with FTX.
The transaction is expected to be completed in early August by FTX. Requests for more information were not immediately responded to.
