Crypto firms are looking to bid once again for bankrupt crypto lender, Voyager Digital’s assets, providing a path out of bankruptcy as FTX appears to be heading into Chapter 11.
Back when Sam Bankman-Fried was still playing thecrypto industry’s white knight, he threw a lifeline to two of the earliest casualties of the post-Terra/LUNA stablecoin collapse: Crypto lenders BlockFi and Voyager Digital.
BlockFi was offered a $250 million line of credit (which grew to $400 million) from his FTX exchange and remained in business, reopening withdrawals, while the $500 million backstop thrown at Voyager by Bankman-Fried’s other company, trading firm Alameda Research, fell short, and it entered bankruptcy.
Now the two crypto lenders’ fortunes may be reversed as FTX’s bankruptcy led BlockFi to close withdrawals once again, and bankruptcy is looming, with Bloomberg reporting yesterday that it will file “within days.”
A month ago, however, FTX.US bid for and won an auction for Voyager’s assets, beating out competitors, including Binance. That looked like it was giving Voyager a path out of Chapter 11 that would have allowed customers to regain access to as much as 72% of their stuck cryptocurrency holdings. Then FTX Group went belly up last week, and Voyager was left scrambling once again.
But this time, it may be the firm that is able to resurface.
While Voyager was left “shocked, disgruntled, dismayed” at FTX’s failure, Bloomberg reported, Voyager appears to have found a new white knight in Binance.US, the American sister firm of the world’s biggest crypto exchange. Binance.US is, CoinDesk reported on Nov. 17, preparing to bid once again for the assets of Voyager Digital. And it is not alone. Two other bidders, Wave Financial and trading platform Cross Tower, are also in the running.
No More White Knights
However, Binance chief communications officer, Patrick Hillmann, told CoinDesk that the company “is not looking to be the ‘white knight’ of crypto… This is a company, with the most to lose as it's market leader, looking around to see where we can help bolster the industry through a black swan event.”
That said, on Nov. 14, Binance CEO Changpeng “CZ” Zhao announced an industry recovery fund “to help projects who are otherwise strong, but in a liquidity crisis.” Which is, clearly, separate from the Voyager bid.
On Nov. 16, he said the as-yet-unspecified fund, would "reduce further cascading negative effects of FTX,” Reuters reported.
Zhao added that Binance had gotten “significant interest so far” from other crypto industry “players that have strong financials,” adding “we should band together.”
OKX, a popular crypto exchange, also told The Block yesterday that it was setting up a $100 million “market recovery fund” to “provide resources and integration support to high-quality projects, alongside provision of technical, liquidity, and other necessary support."
