Crypto News

Crypto Lender Voyager Returns $270M in Client Funds

Key Findings:

  • US Bankruptcy Judge Michael Wiles has approved Voyager to repay $270 million in customer funds.
  • Last month, it was revealed that Voyager holds $1.3 billion in client crypto assets.
  • Voyager has confirmed that there are no fewer than 88 interested parties interested in rescuing the company from its financial troubles.

It is welcome news that bankrupt crypto brokerage Voyager Digital has received approval to return $270 million in client funds, overcoming one of the biggest obstacles it has faced since filing for Chapter 11 bankruptcy was.

More specifically, Voyager filed for bankruptcy a week after suspending withdrawals, trading, and deposits on its platform.

customer funds

The Toronto-based firm, which is estimated to have more than 100,000 creditors, assets and liabilities of between $1 billion and $10 billion of the same value, received approval from US Bankruptcy Judge Michael Wiles, who is overseeing Voyager’s case.

Wiles ruled that the company had provided “sufficient basis” to support its claim that customers should be granted access to the custody account held at the Metropolitan Commercial Bank (MCB).

investment tip Crypto Lender Voyager Returns $270M in Client Funds, Crypto Trading News

While Voyager has received approval to return $270 million in customer funds, the question remains whether crypto assets on its platform are owned by customers or the company, which is in bankruptcy proceedings. It could be that this decision falls on the presiding judge Wiles.

Last month, it was revealed that Voyager holds $1.3 billion in customer crypto assets, spread across 3.5 million active users. According to a court document, approximately $100 to $200 million was held in those accounts for the benefit of customers rather than in Voyager’s bankruptcy estate.

In the case of Voyager, a reconciliation and fraud prevention process was pending due to the potential risk of unauthorized customers fraudulently requesting cash from MCB. It has not yet been determined how customers will receive their funds, but one option would be to allow other companies to bid on Voyager’s assets.

rescue operation

During a hearing presentation this week, Voyager confirmed that there are as many 88 interested parties interested in bailing the company out of its financial troubles. In addition to “active discussions” with a number of prospective buyers, the filing revealed that Voyager has entered into non-disclosure agreements with 37 potential buyers.

One of the most notable bids came from Alameda Ventures and FTX last month. Alameda Ventures had proposed to buy all of Voyager’s assets and outstanding debt in order to offer early liquidity to clients through the FTX US exchange.

FTX CEO Sam Bankman-Fried argued that the move would give Voyager’s customers the ability to access assets that would otherwise be frozen for a significant period of time as the case navigates through the bankruptcy court.

However, Voyager’s attorneys called FTX’s proposal a “low-ball offer” aimed at advertising and not adding value to customers. Their rationale for doing so was that Alameda Ventures would have proposed a liquidation with FTX serving as liquidator, potentially affecting the determination of the value of Voyager’s cryptocurrency assets and loans.

As it currently stands, the company’s proposal, which comes closest to a restructuring plan, would distribute funds to customers in a combination of cash, its cryptocurrency holdings, proceeds from the Three Arrows Capital recovery, common stock in the reorganized company, and Voyager tokens .

Source: Crypto News Deutsch

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