Following the Voyager Digital VYGVF bankruptcy filing in New York earlier this month, Sam Bankman-Fried's crypto exchange FTX on Friday announced a joint offer with West Realm Shires, the owner and operator of FTX US, and Alameda Ventures, to provide early liquidity to Voyager customers.
Details Of The Agreement: Benzinga has been provided access to the Customer Liquidity and Asset Purchase Agreement presented by FTX, which includes the following details:
"FTX and Alameda have heard the statements made by Voyager about the importance of protecting customers. The chapter 11 case exposes customers with unsecured claims to extended illiquidity and a substantial risk of further losses, without the right to the appreciation of the specific crypto assets in which they originally invested," the agreement reads.
"FTX and Alameda each recognizes the scope of customer losses and jointly propose a transaction to mitigate the harm. Under this transaction, Voyager’s customers would receive at least partial liquidity immediately, and the opportunity to withdraw that liquidity or freely reinvest it in their choice of digital assets," the documents explains. "Our approach is not novel. It is consistent with how other failed retail financial institutions have prioritized the upfront protection of customers."
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"Specifically, as described in more detail in the attached term sheet, FTX and Alameda jointly propose a two-prong transaction whereby:
Alameda will purchase all Voyager digital assets and digital asset loans (other than the loans to Three Arrows Capital (“3AC”), discussed below)
in immediately available cash at fair market value. Alameda would pay the cash value of Voyager’s digital assets into escrow; and FTX (or an applicable subsidiary thereof) will offer those Voyager customers who on-board with FTX the ability to receive their share of that cash in an account at FTX," the agreement states.
The document adds, "Customers could withdraw their cash without gates or lockups or, if they choose, re-invest it in digital assets of their choice. FTX would waive the first month of trading fees for Voyager customers who wish to purchase digital assets rather than withdraw their cash."
"Customers are under no obligation to sign up with FTX and doing so would be fully voluntary. FTX is also not requiring any minimum number of customers who would need to agree to participate," the agreement notes. "Any customer that does not wish to sign up with FTX would continue to retain all of their rights and claims in the bankruptcy proceedings, but would not receive early access to a distribution on their claim via FTX."
Finally, the document notes that, "Even those customers who wish to be “long” cryptocurrency should not be forced to do so by holding unsecured claims in a bankrupt company, at least not when there is an opportunity to receive cash immediately."
FTX says it hopes to close the transaction as quickly as possible, preferably in early August.
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