Voyager Digital’s Bankruptcy Plan Offers 35% Payout to Crypto Customers

Voyager Digital, the bankrupt crypto lender, has projected that its customers will receive approximately 35% of their cryptocurrency deposits as the company enters

Voyager Digital, the bankrupt crypto lender, has projected that its customers will receive approximately 35% of their cryptocurrency deposits as the company enters the winding-down phase following the unsuccessful acquisition attempt by crypto exchange Binance. US.

In a court hearing in Manhattan, U.S. Bankruptcy Judge Michael Wiles approved Voyager’s liquidation plan, allowing the company to return approximately $1.33 billion worth of crypto assets to its customers and cease its efforts to reorganize under Chapter 11.

According to Voyager’s official creditors committee, customers may be able to initiate withdrawals starting from June 1. However, any distribution beyond the initial 35% will depend on the outcomes of future legal proceedings.

Voyager filed for bankruptcy protection in July, citing cryptocurrency market volatility and a default on a substantial loan issued to crypto hedge fund Three Arrows Capital (3AC).

During Voyager’s bankruptcy period, two attempts to sell the company’s assets were unsuccessful. Initially, a deal was pursued with FTX for $1.42 billion, but it fell through when FTX faced internal difficulties in November. Subsequently, Binance.US stepped in with a $1.3 billion offer, but the deal was canceled on April 25 due to concerns about a “hostile and uncertain regulatory climate.”

The potential recovery for Voyager’s customers largely hinges on ongoing litigation with FTX, which aims to reclaim $445.8 million in loan repayments made to Voyager prior to FTX’s bankruptcy filing.

If Voyager achieves a favorable outcome in the FTX litigation, customers’ expected recovery could increase to 63.74%, as per the company’s court filings.

Voyager intends to repay customers using the same type of cryptocurrency that was held in their accounts. However, for deposits consisting of unsupported cryptocurrencies that cannot be withdrawn from Voyager’s platform, as well as Voyager’s proprietary VGX token, customers will receive repayment in the form of the stablecoin USDC.

Voyager joins the ranks of several other crypto lenders, including Celsius Network, BlockFi, and Genesis Global Capital, that filed for bankruptcy in 2022 following the pandemic-induced crypto boom.

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