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- 1 Voyager Digital said that customers would soon recover 35% of their cryptocurrency.
- 2 The company will return $1.33 billion in crypto assets to customers.
Voyager Digital, the crypto lender is now declared Bankrupt. The main reason behind is the failed buyout by Binance U.S. But soon, the customers will recover 35% of their cryptocurrency.
Michael Wiles, the U.S. Bankruptcy Judge approved Voyager’s liquidation plan during the court hearing in Manhattan. The judge also added that under Chapter 11 Bankruptcy Code, the company is allowed to return the assets but the reorganization efforts would be restricted.
Voyager Digital Announces further payments depending on future litigation
Binance U.S. came up with an offer of $1.3 billion but later called the deal off. The reason cited is a hostile and uncertain regulatory climate. Voyager Digital reportedly owed about $75 million to Alameda Research, a trading firm founded by Sam Bankman-Fried.
It recently threw a lifeline of $485 million in withdrawals that can be made by June 1. Any distribution beyond 35% will depend on the result of future litigation. Referring to the volatility in the cryptocurrency market, Voyager filed for bankruptcy protection in July. It also filed for default due to a large loan made to the crypto hedge fund Three Arrows Capital (3AC).
Voyager said that Three Arrows Capital, a high-profile hedge fund that filed for bankruptcy last week, owed more than $650 million. Three Arrows Capital was founded by Suisse traders Zhu Su and Kyle Davies. It has approx $10 billion in assets.
In a press release, Voyager said it is trying remedies for recovery from 3AC. It also includes the court-advised processes in the New York and British Virgin Islands.
Voyager Digital Ltd. provides cryptocurrency brokerage services. The company also gives access to assets and commission-free trading.
It has institutional and retail investors worldwide. It provides crypto assets trade solutions. It also provides data, wallet, and custody services through its platform. Now, it has suspended withdrawals, trading, and deposits on its platform.
The two failed sales attempts are the reason behind Voyager’s bankruptcy. The first sale attempt was with FTX for $1.42 billion in November. And the second deal was with about $960,000 to Google. It is all disclosed in the filing. It also reveals that it had between $1 billion and $10 billion in assets and more than 100,000 creditors.
Recovery Hope for Voyager Customers Depends On FTX Legal Action
The hope of recovery for Voyager customers depends on the result of legal action with FTX. It is seeking to win back $445.8 million in loan repayments made to Voyager before FTX collapsed into bankruptcy.
According to Voyager’s court filing, if Voyager wins the FTX litigation, then the customers’ recovery will rise to 63.74%. Voyager plans to repay customers with the same type of cryptocurrency they had in their accounts.
The Voyager platform will not let the withdrawals of deposits that are in unsupported currencies. Voyager will pay in stablecoin USDC to those holding the VGX token.
Many crypto lenders filed for bankruptcy in 2022. Some of them include Voyager, BlockFi, Genesis Global Capital, and Celsius Network. But, the little relief is with the customers to have 35% withdrawals soon.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
