One way or another, FTX seems to always get its way.
So, what changed?
How We Got Here
If you had forgotten how Voyager and other crypto lenders got into such a pickle, here’s a quick recap:
- 1991: Do Kwon, the founder of the stablecoin Terra, is born.
- Early 2000s: Su Zhu and Kyle Davies, founders of crypto hedge fund 3 Arrows Capital (3ac), become high-school friends.
- 2020: The Fed turns on the money printer to fight against Covid-19, sparking a crypto bull run.
- 2020 – Early 2022: The bull run nets Luna and 3ac billions of dollars.
- March 2022: The Fed begins raising rates to combat record inflation.
- May 2022: Terra, now worth ~$30 billion, collapses.
- June 2022: Under intense pressure from the market downturn and strapped for cash after the Terra collapse, 3ac folds.
- July 2022: Slumping asset prices and a lost $665 million loan to 3ac force Voyager to declare chapter-11 bankruptcy.
It is at this point that FTX made its offer to Voyager. We covered the initial offer and Voyager’s reaction in depth in our original story coverage, but the gist is that Voyager declined because they thought it was a lowball offer.
Instead of accepting the offer, Voyager chose bankruptcy and an auction process. Turns out that was a wise decision.
After several bidding rounds, Voyager accepted a bid from FTX of $1.4 billion. Under the terms of the deal, FTX acquires all of Voyager’s digital assets. Furthermore, Voyager’s customers will be able to recoup their losses and, importantly for FTX, have the option of starting trading accounts on FTX.
Overall, it looks like a win for all parties involved. Voyager got the buyout amount they desired. FTX gets the new customers they desire. And the customers get compensated for their losses.