Crypto lender Voyager Digital announced on Wednesday that it will be winding down operations and returning approximately 35% of customers' cryptocurrency deposits.
Voyager Digital Will Return 35% of Customer Funds
Crypto lender Voyager Digital announced on Wednesday that it will be winding down operations and returning approximately 35% of customers' cryptocurrency deposits. The approval of Voyager's liquidation plan by U.S. Bankruptcy Judge Michael Wiles allows the company to distribute around $1.33 billion in crypto assets to its customers, effectively ending its reorganization efforts under Chapter 11. Customers may expect to make withdrawals starting from June 1, with any additional distributions contingent upon future litigation outcomes.
Voyager had filed for bankruptcy protection in July, citing cryptocurrency market volatility and a default on a substantial loan granted to crypto hedge fund Three Arrows Capital (3AC). Despite two unsuccessful sales attempts during its bankruptcy proceedings, Voyager remains entangled in litigation with FTX, seeking to recover $445.8 million in loan repayments made to Voyager before FTX's own bankruptcy. The potential recovery for Voyager's customers hinges significantly on the resolution of the FTX litigation, with expected recovery increasing to 63.74% if Voyager emerges victorious, as stated in court filings.
To facilitate repayments, Voyager plans to refund customers with the same cryptocurrency they held in their accounts. However, for deposits involving unsupported cryptocurrencies and Voyager's proprietary VGX token, customers will receive repayment in the stablecoin USDC instead.
