FTX Sues Voyager Digital to Claw Back $446M in Loan Repayment Made in 2022

Bankrupt crypto exchange FTX sued crypto lender Voyager Digital on Monday, seeking to claw back $445.8 million in loan repayments that FTX made before collapsing into bankruptcy in November 2022.

FTX​ and Voyager both filed for bankruptcy amid a 2022 collapse in cryptocurrency markets, but Voyager's bankruptcy preceded FTX's filing by four months.

After Voyager filed in July, it demanded repayment of all outstanding loans to FTX and its affiliate hedge fund Alameda Research.

FTX said in a court filing that on Alameda's behalf, it paid Voyager $248.8 million in September and $193.9 million in October. FTX also made a $3.2 million interest payment in August, according to its court filings.

Because those loan payments were made so close to FTX's own bankruptcy filing, they are eligible to be clawed back and potentially used to repay other FTX creditors, according to FTX's complaint.

FTX, once among the world's top crypto exchanges, shook the sector in November by filing for bankruptcy, leaving an estimated 9 million customers and other investors facing losses in the billions of dollars.

Its founder Sam Bankman-Fried has been indicted on fraud charges, and several top executives, including Alameda Research CEO Caroline Ellison, have pleaded guilty to fraud. Bankman-Fried has denied wrongdoing​ and is scheduled for trial in October.

In its Monday court filing, FTX acknowledged the allegations that Alameda raided FTX customer assets to cover its risky borrowing and lending. But it said Voyager and other crypto lenders were complicit in Alameda's conduct, "knowingly or recklessly" pushing their clients' assets toward Alameda.

"Voyager's business model was that of a feeder fund," FTX said. "It solicited retail investors and invested their money with little or no due diligence in cryptocurrency investment funds like Alameda and Three Arrows Capital."

Three Arrows Capital also went bankrupt in 2022​, and its founders have refused to cooperate with court-appointed liquidators who are trying to recover assets for Three Arrows customers.

Source: Reuters