Bankrupt crypto broker Voyager cleared to repay $1.3 billion to creditors

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The U.S. Bankruptcy Court for the Southern District of New York cleared the way for bankrupt Voyager Digital to begin repaying its creditors.

As Reuters reported, Judge Michael Wiles approved the company’s liquidation plan, allowing Voyager to return approximately $1.33 billion in crypto to customers.

At today’s hearing, the Court approved the liquidation proceedings. We are working with Voyager to get the plan into effect as soon as possible (as soon as this Friday), Voyager’s Official Unsecured Creditors Committee said.

The committee added that it will be disbanded after the liquidation plan takes effect, targeting June 1 as the deadline to finalize the initial distribution of funds.

3/ We are still striving to make initial distributions available no later than June 1st. We will provide additional updates as they become available.

Voyager Official Unsecured Creditors Committee (@VoyagerUCC) May 17, 2023

The bankruptcy plan, the third for the company, was filed on May 5 following Binance.US’ decision to withdraw from the previously reached agreement.

According to information provided on Voyager’s website, the estate is in possession of $1.334 billion in assets, which equates to 75.68% of the total value of client claims against Voyager’s estate.

However, due to certain holdbacks, customers should only anticipate an initial payment of 35.72% of their receivables. Any further distribution is dependent on the outcome of future litigation that revolves around the FTX/Alameda preference claim dispute, the success of any additional claims brought by the Voyager plan administrator against third parties, and any recovery by the estate of Traveling as a creditor in the liquidation of Three Arrows Capital.

Citing Judge Michael Wiles’ order, Voyager said initial payments will be made either in crypto through the Voyager app or in cash after a 30-day waiting period.

Regarding deposits held in unsupported cryptocurrencies that cannot be withdrawn from Voyager’s platform and Voyager’s proprietary VGX token, the company said customers will be refunded with USDC stablecoins. .

The crypto broker filed for Chapter 11 bankruptcy in July 2022, a year after revealing it had massive exposure to bankrupt crypto hedge fund Three Arrows Capital (3AC) and has since been working on how to return the assets to investors.

At one point, crypto exchange FTX considered buying the company’s troubled assets, but the deal was called off when FTX itself went bankrupt in a sudden collapse that rocked the banking industry. crypto last November.

Last month, Voyager reached an agreement with the US federal government, allowing it to sell its assets to the US arm of crypto exchange Binance. This was also removed after Binance.US pulled out of the deal on April 25.

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