In legal documents presented last Sunday (24), lawyers for the cryptocurrency lender Voyager Digital described the claims of the crypto exchange’s proposal FTX and the sister company Research Alameda to offer liquidity to the clients of the voyager as “misleading or false”.
In the document, attorneys for Kirkland & Ellis LLP, which are handling the bankruptcy filing of Voyager Digitalsaid the proposal was “a low-level offering dressed up as a knight’s ransom”.
“By making this proposal publicly in a press statement laden with misleading or false allegations, AlamedaFTX violated many obligations to creditors and the bankruptcy court.
“voyager reserves all rights and remedies against AlamedaFTX for its clear and intentional subversion of the bankruptcy process.”
FTX refutes Voyager Digital allegations
In response to the document, the CEO gives FTX and founder of Avenue – Sam Bankman Fried – defended the proposal, arguing that it tries to offer customers of the Voyager Digital an opportunity to access the blocked funds at the creditor cryptocurrenciesat a time when the company faces complex bankruptcy proceedings.
The proposal made by FTX would benefit it, as it requires customers of the voyager open an account with a crypto exchange.
In addition, Bankman-Fried stated that the response from voyager represents the self-interest of legal advisers who wish to benefit from a protracted process.
“To clarify: our offer would return 100% of the remaining assets of the Voyager Digital to the company’s customers, including claims on anything recovered in the future,” said the CEO of FTX in a tweet.
In a message to the Block, Ramnik Arora of FTXsaid that the company’s proposal is “simple”.
“We are buying the real estate assets at fair market value and distributing them to clients.”
“Imagine that the company had 10 ETH and you had deposited 1 ETH. Basically, you should have 10% recovery. However, the way bankruptcy works, you may never get back what’s yours (denominated in dollars). So if this whole process takes five years, and ETH exceeds $10,000, you would still only receive $1,150.”
Research Alameda and Voyager Digital are navigating the crypto market after crypto hedge fund bankruptcy Three Arrows Capital – an event that acted as a counterwind to companies in this market. Three Arrows Capital defaulted on a loan in excess of $670 million.
Avenue borrowed $376.8 million worth of cryptocurrencies from Voyager Digital. The crypto lender, in turn, borrowed $75 million from Alameda to manage its liquidity, according to Wall Street Journal.
voyager stated, further, that the offer “transfers significant value to AlamedaFTX and completely eliminates the value of assets that are not of interest to the AlamedaFTX”.
Voyager Digital presented a series of arguments as to why the proposal “harms customers” but “benefits AlamedaFTX”. One argument is that the proposal would undermine the competitive process and therefore undermine efforts to maximize value.
The crypto lender also argued that the proposal by the companies created by Bankman-Fried also ignores tax consequences of converting and paying cryptocurrency claims to dollars and would “effectively eliminate the VGX token,” resulting in the loss of more than $100 million in value.
Voyager Digital said it will consider “any serious proposal” that is better for clients than its own standalone plan.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
