Crypto Exchange FTX to Buy Bankrupt Voyager

investopedia.com:

Crypto exchange FTX has acquired bankrupt crypto lender Voyager for $1.42 billion. The crypto exchange won in an auction to purchase Voyager's assets against competing crypto investment firm Wave Financial.The move comes after Voyager rejected FTX's bailout proposal earlier this year.

Voyager said in a press release late Monday night that FTX US's bid is valued at approximately $1.42 billion and is comprised of the fair market value of all Voyager cryptocurrency at a to-be-determined date in the future, which at current market prices is estimated to be $1.311 billion, plus additional consideration that is calculated as providing approximately $111 million of incremental value.

In July 2022, Voyager filed for Chapter 11 bankruptcy protection after the $2 trillion crypto market crash rendered it unable to honor withdrawals from its user base. Voyager's crash was also prompted partially from the collapse of Three Arrows Capital (3AC). 3AC functioned as a hedge fund that serviced loans from other institutions, one such being Voyager, to make risky gambles on tokens. Its portfolio included bets on the collapsed stablecoin TerraUSD and defaulted on borrowings from Voyager worth $670 million.

Up until its downfall, Voyager had been claiming that investors’ funds were protected by the Federal Deposit Insurance Corp. (FDIC), but this turned out not to be the case. Voyager’s cash deposits are kept with Metropolitan Commercial Bank, a New York-based lender, and FDIC insurance only covers the event of failure of the bank, not Voyager.

FTX's move to purchase Voyager's assets shows promising movement toward compensating users of Voyager, who have few legal avenues in securing the crypto they lost in the platform's crash. Voyager has