Court Record Shows FTX Is Paying $51 Million In Cash For Voyager Assets

Twitter icon  •  Published 1 year ago  •  Hassan Maishera

A recent court filing has revealed that cryptocurrency exchange FTX will pay only $51 million in cash for assets belonging to Voyager Digital.

It was announced last week that FTX won a $1.4 billion bid to acquire bankrupt crypto firm Voyager Digital. However, the recent court filings indicate that the cash paid for the firm was $51 million, significantly lower than the acquired amount. 

According to a recent CNBC report, most of FTX’s offers focused on Voyager’s crypto holdings, which was a total of $1.31 billion. The court filing added that these holdings are set to be distributed to eligible creditors on a pro-rata basis

FTX, one of the largest cryptocurrency exchanges in the world, has pursued an aggressive buying spree over the past few months. The crypto space has been plunged into a bearish trend since the start of the year, and several companies have been struggling.

Sam Bankman-Fried, FTX’s founder, continues to snap up deeply discounted assets as some companies default on payments while others declare bankruptcy. 

According to the court filing, FTX considers the non-crypto assets of Voyager Digital to amount to $111 million. The non-crypto assets include the users, intellectual property, and structure of Voyager itself. 

The filing added that only $51 million of the $111 million is for Voyager’s assets, intellectual property, and user base. The remaining $50 million will be distributed to Voyager users who successfully onboard with FTX, and the cryptocurrency exchange added another $20 million “earn out” allowance.

The filing didn’t indicate the beneficiaries of the earnout. However, earnouts are included in acquisitions as a way to incentivize founders and management teams of the company being acquired. 

In its recent bankruptcy filing, Voyager Digital revealed that it held around $900 million in cryptocurrency assets for its customers. The firm had another $456.44 million loaned out and $173.68 million held as collateral from borrowers. 

Last week, Voyager Digital announced that it had been acquired by FTX. The firm sent out a press release following the sale to state that the bid was made up based on the market value of its crypto holdings “at a to-be-determined date in the future,” said to be around $1.3 billion, with additional consideration of $111 million of what it says is “incremental value.”

FTX said Voyager users who chose to migrate to its platform would receive a pro rata distribution of Voyager assets. The assets would be based on their portion of Voyager’s overall holdings.

FTX is also considering acquiring Celsius, another embattled cryptocurrency company. FTX reviews within and outside the United States have been positive, and its acquisition of embattled cryptocurrency companies could attract many crypto traders to the cryptocurrency trading platform. Also, the low FTX fees also mean that the cryptocurrency exchange is growing far more quickly than any other reputable crypto trading platform.

Author

Hassan Maishera

Hassan is a Nigeria-based financial content creator that has invested in many different blockchain projects, including Bitcoin, Ether, Stellar Lumens, Cardano, VeChain and Solana. He currently works as a financial markets and cryptocurrency writer and has contributed to a large number of the leading FX, stock and cryptocurrency blogs in the world.