The managers steering failed crypto hedge fund Alameda Research through chapter 11 have sued Voyager Digital for nearly $446m, alleging it received preferential payments while Sam Bankman-Fried’s crypto empire collapsed.
In a lawsuit filed on 30 January, Alameda accused Voyager of feeding its customers’ money to risky crypto companies without due diligence, which helped fuel the alleged misuse of customer funds that brought down Alameda and its affiliated crypto exchange, FTX.
The complaint against Voyager, also bankrupt and a shell of its former self, marks the first time since FTX and Alameda filed for bankruptcy that they have sought to claw back funds through litigation.
Voyager Digital, a crypto broker and lender that lent its customers’ money to other cryptocurrency firms, filed for chapter 11 protection in July after its largest borrower Three Arrows Capital defaulted on an uncollateralised loan comprised of 15,250 bitcoin and $350m in USD Coin.
READ Twenty Most Influential in Crypto 2023
Voyager also extended hundreds of millions of dollars worth of cryptocurrency loans to Alameda. Before Alameda’s collapse in November, the hedge fund repaid approximately $445.8m in borrowings from Voyager, according to 30 January’s complaint, filed in the US Bankruptcy Court in Delaware.
Alameda’s lawyers said that since the nearly $446m in payments to Voyager were made less than three months before the trading firm and roughly 100 other FTX affiliates filed for bankruptcy, the company is entitled to claw back the funds. Typically, many repayments made 90 days before a chapter 11 filing are subject to clawback to repay other creditors.
A spokesman for Voyager didn’t immediately respond to a request for comment. Voyager has separately alleged that Alameda sought to undermine its restructuring efforts to fill holes on the trading firm’s own balance sheet resulting from its fraudulent business operations.
READ Crypto’s influencers are still in a battle against risk
FTX saw customers attempt to pull billions of dollars of deposits from its platform after allegations surfaced that its co-founder, Sam Bankman-Fried, used customer money to fund risky bets at Alameda without their consent or knowledge. The company’s managers are now scrutinising funds that left FTX and its affiliates to address shortfalls in customer money in the still-frozen platform.
Voyager customers have been caught up in a series of crypto collapses. In September, FTX won the auction to buy the bankrupt lender’s assets with a purchase price of about $50m, but Voyager then reopened its bidding process after FTX went bankrupt. In January, Voyager won court approval to sell its assets to the US arm of crypto exchange Binance.
Write to Alexander Saeedy at alexander.saeedy@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com
This article was published by The Wall Street Journal, part of Dow Jones
