FTX – the now defunct crypto exchange that was previously run by founder and head executive Sam Bankman-Fried – is suing former crypto lending platform Voyager Digital for nearly $500 million.
FTX and Voyager Are Now at Odds
Voyager Digital filed for bankruptcy back in the summer of 2022. The company collected (allegedly) nearly $250 million from the former digital exchange in September, plus an additional $194 million about a month later. FTX also made interest payments on the debt it reportedly owed the firm.
However, all this occurred prior to the bankruptcy of FTX. The company now says its ongoing proceedings allow it to take back what it paid the failed lending company. Also, in a recent court filing, FTX attempts to lay some of the blame regarding what happened with it on Voyager.
The company admits in the documents to having used customer funds to pay off loans owed by Alameda Research, the parent company also owned by Sam Bankman-Fried. However, FTX also alleges that Voyager shares some of the blame. The documents say:
Voyager… funded Alameda and fueled that alleged misconduct, either knowingly or recklessly. 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. To that end, Voyager lent Alameda hundreds of millions of dollars’ worth of cryptocurrency in 2021 and 2022.
The original idea was that FTX was either going to absolve Voyager Digital or give it the funds it needed to bail itself out. Sam Bankman-Fried long went on a crusade during the late months of 2022 to try and save the ailing digital currency firms that were falling apart thanks to the ongoing bearish trends of bitcoin and many other leading forms of crypto (i.e., Ethereum).
However, these plans fell through when FTX was forced into a state of bankruptcy itself. At this stage, it’s unknown if FTX has a point in what it’s saying about Voyager or if this is a last-minute attempt to try and shift blame onto another party so that the court, in turn, goes easy in the sentencing process.
A Huge Embarrassment
FTX will likely go down as one of the biggest embarrassments in the history of crypto. First rising to fame in 2019, FTX was only three years old when it was labeled one of the biggest and most popular cryptocurrency exchanges in the world, ultimately coming into the top five by 2022. The man behind it – SBF – was lauded as a genius, and his net worth was in the billions prior to the company’s collapse.
Since then, Bankman-Fried has been arrested and charged with fraud amongst other things. He is currently awaiting trial at his parents’ California home.
