Bankrupt crypto lending platform Voyager Digital won court approval on Wednesday to begin paying back long-trapped money to its customers.
So far, customers are guaranteed to receive only 36% of what is due to them.
- The authorization to initiate liquidation procedures comes more than 10 months after Voyageur frozen client withdrawals in July 2022, shortly after former hedge fund Three Arrows Capital (3AC) filed for bankruptcy.
- As reported per Bloomberg, Judge Michael Wiles said “no one is happy with the liquidation,” referring to customers unhappy with the bankruptcy process and the outcome. Common criticisms included the cost of bankruptcy, the amount paid to attorneys, monitoring the case, and the fractional returns creditors would receive.
- Still, Wiles noted that was their only option because Voyager simply didn’t have the funds to issue full refunds to customers.
- “Hindsight is 20/20 – I’m sure everyone wishes something better had happened,” Wiles said. “We are where we are, we try to do our best with where we are.”
- Voyager’s woes continued long after deposit for bankruptcy in July. His original plan to hit a repurchase agreement with FTX failed when the crypto exchange imploded in November. Voyager’s creditors then subpoenaed FTX executives for information on its plan to buy the company, arguing whether it was a reasonable offer or just a publicity stunt. .
- Voyager’s billion-dollar takeover deal with Binance US also fell through last month, with the former pulling out citing a “hostile and uncertain regulatory climate in the US”.
- The lender currently has just $630 million to pay off $1.8 billion in customer claims, according to a May 5 court filing. Its holdings could increase if an ongoing dispute with FTX proves successful.
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