Voyager Digital has announced its plan to liquidate its assets and shut down operations after failing to secure purchase deals with both Binance and FTX.US.
The FTX-Voyager acquisition fell through due to the sudden bankruptcy of FTX and the subsequent arrest of its chief, Sam Bankman-Fried. On the other hand, the failed deal with Binance.US was viewed as a significant setback for the digital asset industry’s efforts to establish a presence in the US amidst increased regulatory scrutiny.
As per a court filing on May 4th, Voyager’s customers are expected to recover an estimated initial value of 35.72%. Additionally, 38 “unsupported” tokens (including TRX, SOL, ALGO, CELO, and AVAX) cannot be withdrawn and will be liquidated and returned to customers. Meanwhile, those with any of the 67 “supported” assets (such as BTC and ETH) will be able to withdraw the allowed percentage of their holdings directly. The initial distributions are anticipated to begin within a few weeks.
The deadline for objection to the liquidation process is May 15th at 4 PM EST, with responses being required to be submitted to the US Bankruptcy Court of the Southern District of New York.
Purchase Deal Failures
Voyager filed for bankruptcy protection in July 2022 following the default of a significant loan position extended by the platform to crypto hedge fund Three Arrows Capital (3AC). The company has since been working on returning assets to investors that used its services.
In October 2022, FTX won the bid to buy Voyager’s assets, a month before FTX’s eventual collapse. Voyager then received an offer from Binance.US, which it referred to as “the highest and best bid for its assets after a review of strategic options with the core objective of maximizing the value returned to customers and other creditors on an expedited timeframe.”
Binance.US spent several months trying to persuade regulators to approve the acquisition but faced multiple hurdles, including opposition from the Securities and Exchange Commission (SEC) and the Committee on Foreign Investment in the US.
The $1 billion deal came to an end last month after Binance.US issued a letter of termination citing the unfriendly regulatory climate. Voyager referred to the situation as “disappointing.”