Bankrupt crypto lender Voyager Digital Ltd. doesn’t plan to sell itself to FTX after the crypto exchange itself was forced into insolvency proceedings, according to a lawyer for Voyager.   

FTX violated its contract to buy Voyager out of bankruptcy, according to Voyager's main bankruptcy attorney Joshua Sussberg. FTX has agreed that Voyager can pursue other bids, but has not yet confirmed that the company is pulling out of the contract to buy the smaller crypto company, Sussberg said in court Tuesday.

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“We were shocked, disgruntled, dismayed,” Sussberg said during a Voyager bankruptcy hearing morning. “There will be no transaction with FTX, I think that is quite obvious.”

The Voyager deal unraveled after FTX founder Sam Bankman-Fried resigned as chief executive and the company filed its own Chapter 11 bankruptcy. That leaves Voyager scrambling to try to sign a new deal with one of the losing bidders, including crypto exchange CrossTower. CrossTower did not immediately respond to a request for comment.

FTX won a weeks long auction for Voyager under a deal tied to court approval of the creditor payment plan, lawyers said during a court hearing held by telephone.

Bankman-Fried’s empire is being run by restructuring experts brought in when the company filed for bankruptcy and regulators in the Bahamas started their own proceedings against FTX. Voyager filed bankruptcy earlier this year after a steep decline in cryptocurrency values.  

The sale to FTX was valued at about US$1.4 billion, of which US$51 million is in cash. As part of the sale, FTX would have moved customers on to its platform. 

The bankruptcy is Voyager Digital Holdings Inc., 22-10943, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).