Wave Financial and Binance are the latest firms to line up fresh bids for collapsed crypto exchange Voyager Digital, after Voyager’s first prospective buyer FTX filed for bankruptcy last week.
Crypto asset manager Wave is making a fresh play to buy the broker, a person familiar with the matter told Financial News, after missing out on buying Voyager’s assets during an auction process run by investment bank Moelis & Co in September.
Crypto exchange Binance’s US arm and exchange CrossTower also lost out to FTX in the latest auction process. CrossTower is “in discussions” with Voyager, another source with knowledge of the situation, told FN on 15 November.
On 17 November, Coindesk reported that Binance is relaunching its bid. Binance declined to comment.
Wave Financial declined to comment.
FTX’s $1.4bn deal to buy the Canadian firm, which operated a crypto exchange in the US, was expected to give it a path out of bankruptcy and grant Voyager’s customers access to their cryptoassets again. But FTX filed for chapter 11 itself on 11 November. In a statement on the same day, Voyager said the deal was “no longer binding”.
The breakdown of the deal is an indication of how FTX’s bankruptcy is hurting smaller companies in the industry. Digital assets firms CoinShares, Galaxy Digital and Genesis have all admitted to having significant exposure to its exchange, while BlockFi, which FTX bailed out to the tune of $250m in June, is planning to lay off workers and is exploring a bankruptcy filing, according to The Wall Street Journal.
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The collapse has sent shockwaves through traditional finance firms, too. BlackRock, VanEck and Sequoia were hit after having backed FTX, and Sequoia said it was writing down its $150m investment to virtually zero.
The asset manager’s first attempt to buy Voyager was a joint bid with CrossTower, but it did not end up making it to the auction process, according to a court document dated 29 September.
Voyager’s main bankruptcy attorney Joshua Sussberg wrote in the document that Wave’s proposal had “severe deficiencies” and that it was “unable to confirm viable financing”.
CrossTower eventually submitted a separate bid at auction, but FTX’s offer was chosen over both of them. Two sources with knowledge of the situation indicated that Wave and CrossTower have decided to bid separately this time around.
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Voyager filed for chapter 11 bankruptcy in the US in July following what it called a “run on the bank”, after it emerged Voyager had lent $650m to failed crypto hedge fund Three Arrows Capital.
In a court hearing on 15 November, Sussberg said FTX had violated its contract to buy the company and that it had agreed to let Voyager pursue rival bids. However, FTX has not yet confirmed that it is abandoning the contract to buy Voyager itself.
“We were shocked, disgruntled, dismayed,” Sussberg said during the hearing. “There will be no transaction with FTX, I think that is quite obvious.”
“I don’t think we’ve seen the end of the contagion factor or the fear that is running through the market,” he added.
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