Bankrupt crypto lending platform Voyager Digital won court approval on Wednesday to begin repaying its customers’ long-trapped money.
So far, customers are only guaranteed to receive 36% of what they’re owed.
- The approval to commence liquidation procedures comes over 10 months after Voyageur froze customer withdrawals in July 2022, shortly after defunct hedge fund Three Arrows Capital (3AC) filed for bankruptcy.
- As reported by Bloomberg, Judge Michael Wiles said that “nobody is happy with the liquidation,” referring to customers dissatisfied with the bankruptcy process and result. Common criticisms included the cost of the bankruptcy, the amount being paid to lawyers, the oversight of the case, and the fractional returns that creditors would receive.
- Nevertheless, Wiles noted that this was their only option since Voyager simply lacks the funds to repay customers in full.
- “Hindsight’s 20/20 – ’m sure everybody wishes that something better had happened,” said Wiles. “We are where we are, we’re trying to do the best with where we are.”
- Voyager’s misfortunes continued long after filing for bankruptcy in July. Its initial plan to strike a buyout deal with FTX fell through when the crypto exchange imploded in November. Voyager creditors later subpoenaed FTX’s executives for information about its plan to buyout the company, investigating whether it was a reasonable offer or just a publicity stunt.
- Voyager’s $1 billion buyout deal with Binance US also fell through last month, with the former pulling out citing a “hostile and uncertain regulatory climate in the United States.”
- The lender currently has just $630 million to repay $1.8 billion in customer claims, according to a court filing on May 5. Its holdings may increase if a pending dispute with FTX proves fruitful.
SPECIAL OFFER (Sponsored) Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO50 code to receive up to $7,000 on your deposits.
