On Sunday, crypto bigwig and investor Sam Bankman-Fried claimed that if his crypto exchange FTX would buy-out bankrupt Celsius Network, it would be to get money back to customers — just like Voyager’s takeover.
“To be clear — in Voyager, our bids are generally determined by fair market price, no discounts;” Bankman-Fried wrote in a Twitter reply. “The goal isn’t to make money buying assets at cents on the dollar, it’s to pay $1 on the $1 and get the $1 back to customers. If we were to get involved in Celsius, it would be the same.”
The curly-haired businessman has often been hailed for bailing out crypto companies in a series of big money investments this year: a reported $400 million for BlockFi and $500 million for Voyager. However, analysis by Protos reveals Bankman-Fried has actually risked very little.
FTX and another Bankman-Fried firm, Alameda Research, released a liquidity plan for Voyager in June. The media, frantic for a positive headline amid a melting market, reported a $500 million bailout.
Alameda would buy all digital assets and loans (barring loans to Three Arrows Capital), in cash at market value. FTX would offer Voyager users the chance to receive their share of claims by opening an FTX account.
However, it was revealed that Voyager owed Alameda $75 million in unsecured debt — Bankman-Fried’s proposal would have favored FTX’s claims on future debt repayments, thereby capitalizing on Voyager’s situation. Shortly thereafter, Alameda bought almost 15 million shares in Voyager before it filed for bankruptcy, bolstering Bankman-Fried’s bargaining power.
In legal proceedings, Voyager’s lawyers said the proposal “is nothing more than a liquidation of cryptocurrency on a basis that advantages AlamedaFTX. It’s a low-ball bid dressed up as a white knight rescue.”
Bankman-Fried finally won a bidding war over Voyager last week — $1.4 billion which court documents reveal will only result in $51 million in cash.
Celsius customers may soon be equally at the whim of the crypto billionaire. In June, FTX pulled out of a Celsius bid due to a “$2 billion hole” in its balance sheet. The Department of Justice (DoJ) has objected to Celsius reopening withdrawals and paying creditors until a proper assets and liabilities breakdown can be determined.
Now, Celsius has officially opened the door for prospective buyers — Bankman-Fried’s FTX has said it may be interested. A bid hearing has been set for October 20.
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