FTX’s winning $1.4 billion bid for bankrupt crypto firm Voyager Digital was announced earlier this week, but court filings indicate that the cash paid for the firm itself is significantly lower — $51 million.
In the Voyager deal, FTX’s consideration for non-crypto assets — the users, intellectual property, and structure of Voyager itself — constitutes a total of “at least $111 million,” filings show. Just $51 million of that is for Voyager’s assets, intellectual property, and user base. The remaining $60 million consists of an accumulated $50 account credit for each Voyager user who successfully onboards with FTX and a $20 million “earn out” allowance.
It was not immediately apparent, based on filings, who would benefit from an earnout, which is often used in acquisitions as a way to incentivize founders and management teams of the company being purchased.
Voyager’s most recent bankruptcy report indicated that the company held just shy of $900 million in crypto assets for customers, with another $456.44 million loaned out and $173.68 million held as collateral from borrowers.
Voyager users who chose to migrate to FTX’s platform would receive a pro rata distribution of Voyager assets, based on their portion of Voyager’s overall holdings.
Voyager’s troubles emerged after the firm extended a loan valued at $670 million to crypto hedge fund Three Arrows Capital (3AC) in early 2022. When 3AC defaulted on its loan obligations in late June, it unleashed a financial cascade that pushed Voyager into bankruptcy and 3AC’s founders into hiding.
FTX’s bid, if approved by creditors, would transfer Voyager’s loan balances — excluding the 3AC loan, which was not part of the deal — to FTX and, by extension, to Bankman-Fried. The $51 million price tag for Voyager and its associated claims would represent a steep discount, given FTX’s assumption of customer assets and loan balances.