Voyager Bankruptcy Cracks Crypto Diehards

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Crypto investors confidence is taking a hit lately with the collapse of Voyager Digital, Bloomberg wrote Thursday (July 7).

There have been reports that customers of the bankrupt broker wont get all their money back, stoking fear into those already intimidated by the declines in digital assets in the last few months.

Veteran crypto traders have often ignored steep losses, saying theyre waiting for the more long-term gains, hoping for rebounds in prices. some people.

One such trader quoted by Bloomberg was Georgia-based Telvin Hodo, who said not having the money from his Voyager account might put his recent home purchase in jeopardy. Hodo is a teacher and has invested around $11,000 over the past year in various cryptocurrencies along with some stablecoins.

And another man quoted in the piece said it was definitely a lesson on reading the small print and knowing what one was getting into.

Voyager recently filed for bankruptcy and there are numerous legal questions, though the company did make it clear that account holders would be impaired by the process, meaning they wouldnt likely get back everything they were owed.

PYMNTS wrote that the Federal Deposit Insurance Corporation (FDIC) is looking into Voyager, which had $350 million in customer deposits stored in a New York bank called Metropolitan Commercial Bank, which is friendly to digital assets.

See also: FDIC Probes Voyager Digital Over Account Insurance Claims

Voyagers marketing said that deposits in Metropolitan were insured by the FDIC, but they are insured against Metropolitans collapse, not Voyagers.

According to WSJ, Voyager had a For Benefit of Customers account with Metropolitan, a standard thing for crypto firms, which act like banks as they take deposits, but arent licensed as banks.

With Voyager, the accounts hold the cash customers use for buying crypto assets, along with what they accumulate from selling them.

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