Sam Bankman-Fried Fires Back at Voyager Digital’s ‘Lowball’ Claim; Claims Voyager Customers Likely to Get ‘F–ked’

FTX Exchange founder and CEO Sam Bankman-Fried fired back at Voyager Digital on Sunday for rejecting his “low-ball” offer to bail the company out, claiming Voyager customers were likely to get “f–ked” as a result.

“Voyager lost customer assets, but it still has the majority left,” Bankman-Fried wrote in a Sunday Twitter thread. “Why haven’t those been returned to customers yet? Let’s say that Voyager has, remaining, 75 percent of assets (I don’t know the exact number). It seems like the first thing that should happen is that customers get back the 75 percent, and then later get back the rest if anything is recovered from 3AC. But that hasn’t happened yet. Why?

“Well, the *traditional* process is that before customers get their assets back, they get fucked,” he added. “First, there’s a long, drawn out process, during which funds are frozen. It can take years. Remember Mt. Gox? That process is *still going on*. Meanwhile, that entire time, various bankruptcy agents are slowly bleeding the customer’s frozen assets dry with consulting fees. This can cost customers hundreds of millions of dollars by the time all is said and done.”

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His stern commentary came after Voyager rejected Bankman-Fried’s proposed restructuring deal — made through his companies, FTX Exchange and Alameda Research — in a court filing earlier in the day, calling it “a low-ball bid dressed up as a white knight rescue.”

“To anyone who reads the proposal even in a cursory way, it will be obvious that the stand-alone plan that Voyager filed is capable of delivering far more value to customers than the AlamedaFTX proposal — which transfers significant value to AlamedaFTX, and completely eliminates the value of assets that are of no interest to AlamedaFTX,” Voyager said in its response, filed in the Bankruptcy Court for the Southern District of New York.

Bankman-Fried offered in his proposal to purchase Voyager with “immediately available cash” at a valuation “calculated by Alameda in good faith based on market practice and available pricing information.” The deal would allow Voyager customers to recover a portion of their holdings in the form of cash by opening accounts on FTX. Bankman-Fried said in his Sunday Twitter commentary that the deal would grant customers 75 percent of their holdings, with a possibility that they could recover the remainder if Voyager won repayment on an outstanding loan of $350 million and 15,250 bitcoin from bankrupt investment firm Three Arrows Capital (3AC).

The 30-year-old billionaire said customers were likely to get far less from alternative offers. However, he claimed Voyager’s consultants had a vested interest in rejecting his deal.

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“See, if a customers had 1 BTC on the platform, and BTC was worth $30k… and then it takes years to go through bankruptcy… what do they get back?” Bankman-Fried wrote. “1 BTC, or $30k? Probably, whichever is worth less. So the longer the process drags out, the more optionality customers lose. So, what’s going on with Voyager? Well, lots of parties were trying to bid $0.10 on the dollar for the assets. If a customer had $100 on the platform, a third party would pay $10 for it, get whatever funds remained (maybe $75), and then the customer… gets back $10. And meanwhile, Voyager’s consultants would be slowly draining the remaining funds by charging fees every month the bankruptcy process dragged on.”

The offer “would let customers–if they chose–get the remaining assets back right away, with no fees or additional haircut,” he said. “So, who’s against our offer? Well, it was voluntary–customers wouldn’t have to use it! But there are parties that *would* lose from it: third parties who want to take some of the customer assets as fees. The consultants, for instance, likely want the bankruptcy process to drag out as long as possible maximizing their fees. Our offer would let people claim assets quickly. Or people who wanted to submit a lower bid–taking a large share of customer assets in the middle.”

Voyager “froze” customer accounts on July 1, four days before it filed for bankruptcy, citing financial difficulties stemming largely from 3AC’s bankruptcy. Its debts include more than $350 million owed to customers, as well as $75 million owed to Alameda Research. Bankman-Fried noted that the debt to Alamada Research would be written off if Voyager accepted his deal.

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“Anyway: in the end, we think Voyager’s customers should have the right to quickly claim their remaining assets if they want, without rent-seeking in the middle,” he added. “They’ve been through enough already. p.s. to clarify: our offer would give Voyager customers back 100 percent of the remaining assets that Voyager has, including claims on anything recovered in the future. Anyway we’ve made our offer, hopefully customers are allowed to choose it if they want. If not guess it’s up to the consultants to ensure prompt liquidity..”

Voyager further lamented in its Sunday filing that “no customer” would “be made whole under the proposal, nor will any cryptocurrency be returned to customers.”

 

You can read Voyager Digital’s full response to the FTX/Alameda proposal embedded above.