Crypto broker Voyager Digital has been working diligently to return assets to its customers after finding itself in a precarious situation. Following failed deals with FTX US and Binance US, the firm has revealed its plan to liquidate a number of digital assets that cannot be withdrawn, including major cryptocurrencies like Algorand (ALGO), Celo (CELO), and Avalanche (AVAX).
On the other side of the coin, so to speak, certain major cryptocurrencies will not be liquidated, but rather returned to customers in digital form at a recovery rate of about 36%, as stated in a court filing. Notable examples of these assets include Aave (AAVE), Ethereum (ETH), Bitcoin Cash (BCH), and 65 others. The former customers could start receiving reimbursements within the next few weeks, according to Voyager.
Last week, Binance US, a sister company of the renowned crypto exchange Binance, withdrew from a $1.3 billion restructuring deal meant to buy Voyager assets. The reason given for their decision was the “hostile and uncertain regulatory climate in the United States.”
Voyager’s troubles initially emerged after the company divulged its substantial exposure to the failed crypto hedge fund Three Arrows Capital. Since then, Voyager has been focusing its efforts on returning assets to investors who utilized its services.
Crypto exchange FTX had initially planned to acquire Voyager’s distressed assets. However, FTX itself spectacularly collapsed into bankruptcy. This sudden and unexpected downfall reverberated throughout the crypto ecosystem and its founder, Sam Bankman-Fried, now faces 13 criminal charges as he awaits trial.
Voyager faces a challenge in attempting to fairly return assets to its customers amidst an uncertain environment. The firm’s decision to liquidate some assets while returning others digitally draws attention to the complexity of the situation. The disparity in recovery rates could potentially cause tension among former customers who may question the fairness of the process.
The future of crypto brokers like Voyager remains a hot topic, as their ability to properly manage and safeguard assets is scrutinized. The regulatory atmosphere in the United States, which played a significant role in the failed Binance US deal, will be an area to watch closely. As powerful players such as FTX and Binance US falter, the crypto industry finds itself grappling with uncertainty, volatility, and regulatory scrutiny. Nevertheless, the sector remains highly dynamic, sparking constant innovation and new possibilities.