FTX is planning to offer early liquidity to customers of bankrupt crypto lender Voyager Digital.
After Voyager filed for Chapter 11 bankruptcy, the joint proposal came in two weeks. The company Alameda Ventures controlled by FTX CEO Sam Bankman-Fried, had previously given Voyager a loan of $200 million in cash/USDC and 15,000 bitcoins.
The crypto exchange said in a press release on Friday, FTX is working together with West Realm Shires, the company that owns FTX.US, and Alameda Ventures to allow Voyager customers to create new accounts on FTX.
FTX said Voyager customers who take the offer will receive an opening cash balance funded by an early distribution on a portion of their bankruptcy claims. The cash can be withdrawn immediately or be used to purchase digital assets on FTX. The plan will not be mandatory for Voyager customers to participate in the plan.
Bankman-Fried said in the press release, “The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks”.
As part of the plan, FTX said it won’t purchase Voyager’s loans to hedge fund Three Arrows Capital, which also filed for bankruptcy this month. Additionally, FTX expects that any recoveries from those loans would be available to fund supplemental distributions to Voyager customers, regardless of whether they have opened an account with FTX.
FTX has plans to complete the transaction in early August.