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Ethos founders make a play for Voyager Digital

Jul 29, 2022
Illustration of a glitching digital coin with binary code on it.

Illustration: Gabriella Turrisi/Axios

The founding team behind the Ethos Universal wallet has thrown its hat in the ring as a bidder for Voyager Digital, but it is facing opposition from the bankrupt crypto firm.

Why it matters: As bankruptcy proceedings unfold, alternative proposals are emerging for Voyager's assets, even if they might not be the all-cash offers it's hoping for.

The latest: In a blog post and legal filing, the founders of Ethos — through their investment firm Emerald Ocean Ventures — shared an alternate proposal for Voyager's restructuring.

  • The plan would involve replacing Voyager's current management and moving customer assets from a centralized trading platform to a self-custodial regime.
  • It would also cease all lending activity. "In my opinion, Voyager did not fail because of market conditions or the world economy. I believe it failed because of unnecessary lending and risk-taking," Ethos founder Shingo Lavine wrote in the blog post.

Flashback: Voyager and Ethos have a history. In 2019, Voyager acquired Ethos and named Lavine its chief innovation officer, and, for a time, he also served on Voyager's board.

  • But, according to the filing, Shingo disagreed with the company’s direction and, as a result, resigned from the board and left the company in February 2021.
  • Earlier this year, Voyager shut down the self-custodial Ethos wallet and moved customer assets onto its own centralized trading platform.

Yes, but: Not surprisingly, the Emerald Ocean offer wasn't met with open arms. According to the legal filing, it has struggled to be deemed an “acceptable bidder" or obtain data room access to conduct due diligence.

  • "The Bidding Procedures appear to be set up to only consider cash bids — not alternative restructuring proposals that may not involve an 'asset sale,'” the filing asserts.

Of note: The Emerald Ocean group is not the only bidder griping about Voyager's process. Sam Bankman-Fried's Alameda Research also filed an objection to the bankruptcy bidding procedures on Thursday.

  • Voyager declined to comment for this story.

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