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Binance, others line up bids for bankrupt Voyager after FTX collapse

Voyager said it has about $1.3 billion in crypto on its platform and more than $350 million in cash on behalf of clients of New York’s Metropolitan Commercial Bank.

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Binance and other crypto firms are preparing takeover offers for beleaguered digital currency lender Voyager Digital after FTX, which had initially agreed to take over the company, filed for bankruptcy.

Voyager filed for Chapter 11 bankruptcy protection in July, which seeks to restructure troubled businesses as viable businesses, after crypto hedge fund Three Arrows Capital defaulted on a $670 million loan from the company.

Voyager was set to be acquired by FTX’s US unit, FTX US, for $1.4 billion after Sam Bankman-Fried’s company won in a US bankruptcy auction. It was then thrown back to square one after FTX itself filed for bankruptcy after experiencing its own bank run-like wave of withdrawals.

Voyager customers have been unable to raise their funds since it paused withdrawals amid an industry-wide liquidity crisis.

This week, Binance confirmed reports that its US subsidiary Binance.US plans to launch a bid to save Voyager from collapse. Binance.US had previously offered to buy Voyager as part of its insolvency auction.

Speaking on Bloomberg, Binance CEO Changpeng Zhao said that Binance.US “will now make another bid for Voyager as FTX is no longer able to honor that commitment.”

Zhao has also set up a $1 billion fund to support distressed companies in the industry.

CrossTower, a crypto and NFT trading platform, was one of the parties that initially competed to buy Voyager in the judicial auction. The company says it plans to make a renewed bid for the company, though details are scarce for now.

CrossTower “is submitting a revised offer, which it believes will benefit both customers and the wider crypto community,” a CrossTower spokesperson told CNBC via email.

CrossTower is also planning its own separate industry recovery fund. The company told CNBC it does not see the fund as “competitive” with Binance’s.

“This is about stabilizing an industry, regaining confidence and rebuilding what may be the future of finance,” said the CrossTower spokesperson.

“We will do this, with funds and talent, and we will work with governments and policymakers and promote transparency. One venture capital fund has not built the technology industry and one recovery fund will not rebuild it.”

Meanwhile, Wave Financial is also planning a new bid to acquire Voyager, after initially losing to FTX, according to a report from London’s Financial News newspaper.

Matteo Perruccio, president of International for Wave, declined to comment on the report when CNBC contacted him via WhatsApp. Last month, Perruccio told CNBC that his company “felt our offer was better for the investors and the debtors.”

Wave’s offer “saw us revitalizing VGX,” Voyager’s exchange token, he said in the October interview.

Voyager customers hope that any company rescue will include VGX, a token created by Voyager as a kind of loyalty rewards program, offering discounts on trading fees.

“We had, I think, pretty bright ideas about how to generate traffic at a much lower acquisition cost and a higher balance per customer, which were the two big problems with Voyager,” Perruccio told CNBC in October.

In August, Voyager halted VGX trading and transfers and outlined a plan for customers to exchange their tokens for new coins on a separate blockchain. The fate of the token, which is down more than 85% since the start of the year, remains unclear.

FTX US had offered to buy all VGX from Voyager and its affiliates for $10 million. But Voyager said it was working on a “higher and better solution” for the token that would be compatible with FTX US offerings.

FTX US is now part of bankruptcy proceedings in a Delaware court along with its parent company and other affiliates, including Alameda Research. The company’s offer was initially rejected by Voyager, who called it a “low bid dressed up as a white knight rescue”.

Another player involved in the messy restructuring process is Ethos.io, a startup that Voyager acquired in 2019. Voyager has only acquired Ethos.io’s technology, and the company plans to revive itself as a separate brand after Voyager’s collapse.

Shingo Lavine, co-founder of Ethos.io, says his company’s technology was core to helping Voyager build out its crypto capabilities. Voyager saw significant growth after offering support for dogecoin, a meme-inspired digital coin, he added.

Adam Lavine, Shingo’s father and co-founder of Ethos.io, said the company has established its own recovery program for VGX holders and Voyager creditors and “has seen a good response so far in the Voyager community.”

So far, “several thousand users representing 10% of the total VGX market cap” have signed up for the recovery initiative, the elder Lavine said. Voyager was not immediately available for comment when CNBC contacted him.

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