The news that FTX, the bitcoin exchange founded by billionaire Sam Bankman-Fried, is set to acquire the company’s assets after winning a bankruptcy auction may provide some comfort to customers of struggling cryptocurrency lender Voyager Digital.

The companies said in a statement late Monday that FTX’s U.S. subsidiary was chosen as the highest bidder for Voyager’s assets after several rounds of bidding. The bid was valued at approximately $1.4 billion, which includes $111 million in “additional consideration” in anticipated incremental value in addition to $1.3 billion for the fair market value of Voyager’s digital assets.

In July, Voyager filed for Chapter 11 bankruptcy because it was unable to pay back customer withdrawals due to a turbulent decline in the value of digital currencies.

The failure of Three Arrows Capital, a purported hedge fund that borrowed money from other organizations like Voyager to make risky bets on tokens like the defunct stablecoin terraUSD, contributed to the firm’s demise. 3AC missed payments on $670 million in Voyager loans in June.

By stating that FTX U.S. “will enable customers to trade and store cryptocurrency after the conclusion of the Company’s chapter 11 cases,” Voyager made a possible shift of its customers to the exchange known. On October 19, the asset purchase agreement will be submitted for approval to the U.S. Bankruptcy Court for the Southern District of New York.

According to the statement, the sale of Voyager’s assets to FTX U.S. is subject to a vote by creditors and “other customary closing conditions.”

The action represents a potential step toward compensating Voyager users, who currently have few legal options for receiving payment for the cryptocurrency they had stored on the platform before it stopped allowing customer withdrawals. Customers of cryptocurrency platforms are treated as unsecured creditors in bankruptcy proceedings, which means they are not actually entitled to the cryptocurrency they purchased and must, like other creditors, seek restitution through the courts. Mt. Gox’s creditors, who lost everything in 2014, are still waiting for payment.

Voyager previously stated on its website and in marketing materials that users’ money was insured by the Federal Deposit Insurance Corporation, but this technically wasn’t true since Voyager’s cash deposits are held with Metropolitan Commercial Bank, a lender with headquarters in New York. Only the failure of the bank is covered by the FDIC insurance; Voyager is not. Voyager received a cease and desist letter from the FDIC and the Federal Reserve in July telling it to stop making claims that it was insured by the FDIC.

Bankman-Fried has come to the rescue of numerous companies during the 2022 crypto winter as a result of the falling value of digital tokens and the ensuing liquidity problems at their platforms. The 30-year-old former quant trader who has become an expert in cryptocurrency has been looking for deals amidst the recent devastation to the sector.

A contract that FTX signed in July gives it the option to purchase lender BlockFi in exchange for a $250 million line of credit. Bankman-Fried claims he still has plenty of money to spend on additional transactions. And according to sources who spoke to CNBC, he may soon receive even more. In an upcoming financing round, FTX is seeking to raise an additional $1 billion from investors.

(Adapted from CNBC.com)