Voyager Digital To Start Paying out Frozen Crypto Funds
In Brief
Court approval has been granted to self-liquidate assets and start repaying customers a portion of their frozen funds.
Bankrupt crypto lender Voyager Digital has been granted court approval to self-liquidate and begin repaying customers a portion of their frozen funds.
On Wednesday, US Bankruptcy Court judge Michael Wiles approved Voyager’s liquidation plan after deals to sell the crypto lender to FTX or Binance failed, Bloomberg writes.
The 36% expected payment is far below the 72%-73% estimated recovery rate for the Binance.US acquisition if it had gone through. If Alameda Research is unable to recover $446 million from Voyager’s estate, the recovery rate could increase.
Voyager’s lawyers are also keeping $259.6 million in additional funds, including fees, administration claims, and other holdbacks, secret. Anyone who has any of the 67 supported tokens, including Bitcoin and Ether, on the platform, can withdraw the amount currently locked. In addition, some smaller digital assets, including Algorand (ALGO), Celo (CELO), and Avalanche (AVAX), will be liquidated and returned to customers.
Voyager customers may be able to withdraw their money as soon as June 1, the company’s official committee of unsecured creditors says. Voyager customers complained about the bankruptcy cost, lawyer fees, and the partial return of crypto to users.
Bankruptcy of Voyager
After the bankruptcy of Voyager in July 2022, Three Arrows Capital exposures have affected the company as it works to return its investors’ assets. Soon after securing Voyager’s assets, FTX collapsed, and despite efforts, it is impossible to know what happened.
Binance offered Voyager $1 billion at the time. In late April, the exchange pulled out of the deal, citing a “hostile” regulatory climate in the United States after the US Securities and Exchange Commission and New York’s financial regulator attempted to halt the deal.
The recovery rate for Voyager customers is incredibly low. In comparison, creditors of Celsius, another bankrupt crypto platform, are estimated to receive 70% of their holdings back.
- Voyager Digital is the second case of a failure of a crypto platform to turn up for court dates. They have permission to distribute $270 million of frozen funds to “customers.” Their lawyer asked for $350 in mid-July.
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- Binance and FTX lead the NYC bidding war over Voyager Digital’s assets—closing Sept. 29
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About The Author
Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
