Customers of beleaguered crypto lending platform Voyager Digital who have been blocked from withdrawing their funds since July 1 are getting a possible lifeline.
Under a proposal made on Friday, customers would have the option to be refunded at least part of their locked-up funds through a new account at sister service FTX instead of having to wait for Voyager’s bankruptcy proceedings to end.
It was not immediately clear what percentage of each customer’s frozen funds would be accessible in the proposal.
The three companies involved in the proposed lifeline are linked to FTX CEO Sam Bankman-Fried. They are FTX Trading (which operates the crypto exchange FTX.com), West Realm Shires (the parent company of FTX US), and Alameda Ventures (the venture arm of Bankman-Fried’s Alameda Research).
“Voyager’s customers did not choose to be bankruptcy investors holding unsecured claims,” FTX CEO Sam Bankman-Fried said in a statement. “The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks.”
The plan, which must be approved by the bankruptcy court, would let customers cash out immediately if they wished. After getting access to the money through their new accounts, they could also use it to buy more crypto through FTX’s platform, FTX Trading said on Friday. Transaction fees on crypto purchases would be waived for a month.
Voyager Digital and FTX did not immediately respond to Fortune’s request for comment.
Alameda Ventures proposed to buy all of Voyager’s crypto assets and loans except those issued to the failed crypto hedge fund, Three Arrows Capital. Voyager customers “can continue to pursue Three Arrows Capital for additional recoveries,” FTX Trading said.
Although it was not immediately clear how much Alameda would spend on its purchase of Voyager’s crypto assets and loans, it would pay a “fair market value” for them based on market practice and available pricing information, the joint letter read.
FTX Trading and its partners on the proposal want the plan approved as soon as possible. The company said it hopes to finalize the bailout “preferably in early August.” In a joint letter, the three companies requested a first response from Voyager by July 26 and hope to have final documents in order by July 30.
Voyager Digital customers have been in limbo since the crypto lender, which at one point offered returns of 8% to 10% on more than 39 digital assets, paused withdrawals and filed for Chapter 11 bankruptcy just days later.
During the bankruptcy proceedings, experts have said its retail customers, which are usually average investors, could be treated as “unsecured creditors,” meaning they would be last in line to receive any lost funds.
