Creditors of the bankrupt crypto broker, Voyager Digital, may finally see some relief in the coming weeks as the firm is reportedly in the final stages of bankruptcy liquidation procedures. The Voyager Official Committee of Unsecured Creditors (UCC) expressed hope that initial distributions of cash and crypto will begin within the next few weeks, following the company’s restructuring plan.
This potential turnaround comes 10 days after Binance.US pulled out of a $1.02 billion deal to purchase Voyager’s assets, citing “the hostile and uncertain regulatory climate in the United States” as the reason for the sudden change. Voyager’s restructuring plan, however, includes a “toggle option” that allows the firm to pursue self-liquidation independently. Consequently, the bankrupt broker can now distribute assets directly to customers through the Voyager platform.
While many creditors may be relieved by this development, the UCC was less than thrilled with Binance.US’s last-minute exit from the deal, announcing that it would investigate the possibility of potential claims against the cryptocurrency exchange. This setback could have jeopardized the return of funds to creditors, adding tension to an already delicate situation.
As part of the legal process, Voyager must now file the liquidation procedure documents with the U.S. Bankruptcy Court for the Southern District of New York. Once filed, parties have 10 days to raise any objections. If there are no objections at the end of that window, Voyager’s liquidation plan will go into effect. If an objection is filed, however, the court will have to hold a hearing to evaluate the objection before the plan can proceed.
Interestingly, 97% of Voyager customers who voted in the court’s restructuring plan were in favor, which at the time, presumed Binance.US would acquire the stranded assets. Now, with the distribution of the assets in limbo, it remains to be seen whether this overwhelming majority that once backed the original plan would still show their support for the self-liquidation process.
The resolution of Voyager’s liquidation will not only provide much-needed relief to its creditors but also highlight the potential risks and rewards central to the ever-growing world of cryptocurrency. Through this high-stakes situation, crypto enthusiasts and investors alike will have much to glean from the outcome, which may serve as a cautionary tale for future crypto businesses facing similar challenges.