crypto lender voyager digital said on Wednesday that customers will recover about 35 percent of their cryptocurrency deposits as the company shuts down its operations after a failed buyout attempt by a crypto exchange. binance.us,
US Bankruptcy Judge Michael Wiles approved Voyager’s proposed liquidation plan at a court hearing in Manhattan on Wednesday, allowing the company to return $1.33 billion (roughly Rs. 11,000 crores) in crypto assets to customers and reorganize under Chapter 11. Got permission to finish his efforts.
Voyager filed for bankruptcy protection in July, citing volatility in cryptocurrency markets and defaulting on a large loan made to a crypto hedge fund Three Arrows Capital (3AC),
Voyager suffered two unsuccessful sales attempts during the bankruptcy. It had initially sought to sell its assets for $1.42 billion (roughly Rs. 11,700 crores). ftx, a deal that fell through when FTX imploded in November. Binance.US stepped in with an offer of $1.3 billion, but called off the deal on April 25, citing a “hostile and uncertain regulatory environment”.
Voyager customers’ recovery hopes are highly dependent on the outcome of litigation with FTX, which is seeking to recover $445.8 million (about Rs 3,670 crore) in loan repayments made to Voyager prior to FTX’s bankruptcy.
If Voyager fully prevails in the FTX litigation, customers’ expected recovery would be 63.74 percent, according to Voyager’s court filing.
Voyager intends to pay customers with the same type of cryptocurrency they had in their accounts. For deposits in unsupported cryptocurrencies that cannot be withdrawn from Voyager’s platform and for Voyager’s proprietary VGX tokens, Voyager will instead pay customers using the stablecoin USDC.
Voyager was one of several crypto lenders to file for bankruptcy in 2022 following a boom in the COVID-19 pandemic. others were Celsius Network, blockfiand Genesis Global Capital.
© Thomson Reuters 2023