Alameda Research, the sister company of Sam Bankman-Fried’s bankrupt crypto exchange FTX, is suing failed crypto lender Voyager Digital for $445.8 million in an effort to recover loan repayments FTX had made to Voyager before filing for bankruptcy.
The rank FTX frenzy still continues to reverberate across the cryptocurrency industry. In the latest turn of events, Alameda slapped Voyager with a lawsuit in an attempt to retrieve nearly $446 million that FTX made to Voyager prior to its bankruptcy filing in November. According to reports, Alameda demanded repayment of all outstanding loans under bankruptcy laws designed to ensure that no creditor is favored over another. Lawyers managing the FTX and Alameda bankruptcy case have sued Voyager in a Delaware court on Januray 30.
Alameda Takes Legal Action to Recover Loans
In its complaint, Alameda stated that Voyager had offered the company credit in a variety of digital currencies. The crypto hedge fund platform stated that it intends to pursue the $446 million in damages on top of any further compensation, which might include legal fees.
Furthermore, the loan payments were made close to FTX’s bankruptcy filing, which means they are eligible to be returned. This can then be budgeted towards paying FTX creditors back. As per bankruptcy laws, there seems a legitimate chance that the funds will be returned.
FTX mentioned that Voyager and other crypto lenders were “knowingly or recklessly” leading them toward Alameda. It stated that “Voyager’s business model was that of a feeder fund.” A feeder fund is a form of investment fund into which hedge fund investors place their capital, which is then transferred to a master fund. In the lawsuit, FTX noted,
“Voyager’s business model was that of a feeder fund. It solicited retail investors and invested their money with little or no due diligence in cryptocurrency investment funds like Alameda and Three Arrows Capital.”
Voyager’s Tryst with FTX
As per the court filing, FTX claimed that it paid Voyager $248.8 million in September and $193.9 million in October. The exchange also made a $3.2 million interest payment in August. FTX and Voyager both filed for bankruptcy amid a 2022 collapse in cryptocurrency markets. However, Voyager’s bankruptcy preceded FTX’s filing by four months.
This is not the first time FTX and Alameda Research crossed paths with crypto lender Voyager Digital. After Voyager filed for bankruptcy, Sam Bankman-Fried’s firms issued a joint offer to buy all Voyager’s digital assets and digital asset loans, excluding Three Arrows Capital (3AC) loans. But, Voyager had categorically rejected the buyout offer calling it a “low-ball bid”.