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Voyager Approved to Start Repaying Frozen Customers’ Accounts

Voyager Approved to Start Repaying Frozen Customers’ Accounts

Bankrupt crypto lending platform Voyager Digital has received court approval on Wednesday to repay its customers’ funds that were trapped for a long time.

However, customers are still expected to receive only 36% of the amount they are owed.

  • The authorization to begin the liquidation process comes after more than 10 months since Voyageur froze customer withdrawals in July 2022, right after Three Arrows Capital (3AC), a collapsed hedge fund, filed for bankruptcy.
  • As revealed by Bloomberg, Judge Michael Wiles acknowledged that “nobody is happy with the liquidation,” given that customers were unhappy with the bankruptcy process and outcome. Complaints primarily target the bankruptcy’s cost, attorneys’ fees, case oversight, and low returns that creditors would receive.
  • Nonetheless, Wiles recognized that there is no other choice since Voyager lacks the resources to repay customers fully.
  • “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.”
  • After filing for bankruptcy in July, Voyager continued encountering difficulties. Its initial deal to merge with FTX failed when the crypto exchange collapsed in November. Voyager borrowers then summoned FTX executives for details on their plan to acquire the company, examining whether it was a sensible offer or solely a publicity stunt.
  • Voyager’s $1 billion acquisition agreement with Binance US also faltered last month, with the latter abandoning it, citing a “hostile and uncertain regulatory climate” in the United States.
  • According to a May 5 court filing, the lender has only $630 million to compensate $1.8 billion in customer claims. Its resources may grow if its pending dispute with FTX yields results.