Cryptocurrency exchange FTX has been given court approval to buy the assets of bankrupt cryptocurrency lender Voyager Digital.
FTX reportedly bid $1.4 billion U.S. for the assets of Voyager Digital, which filed for bankruptcy protection in July of this year amid a liquidity crisis.
Prior to the bankruptcy filing, regulators had been scrutinizing Voyager Digital’s business practices, particularly the company’s claims that investors' deposits were protected by Federal Deposit Insurance Corporation (FDIC) insurance.
While FDIC insurance protects bank deposits up to $250,000 U.S., it would not cover cash that is converted into stablecoins, which was the case at Voyageur Digital.
Voyageur Digital ran into financial trouble as 60% of its loan book was attached to Three Arrows Capital, which filed for bankruptcy in July, leading to a wave of failures in the crypto industry.
Voyager Token (VGX) increased nearly 4% to $0.76 U.S. on news that FTX is buying Voyageur Digital’s assets.
