Bankrupt crypto lender Voyager Digital has recently gained court approval to self-liquidate assets and begin repaying customers a portion of their frozen funds. This decision comes months after failed deals to sell the troubled company to FTX or Binance.US. A US Bankruptcy Judge has approved Voyager’s liquidation plan, which will see users receive about 36% of the funds they are owed. This is significantly lower than the 72-73% estimated recovery rate that would have been possible if the Binance.US acquisition had proceeded.
However, there is a possibility that the recovery rate could increase if defunct crypto trading firm Alameda Research fails in its attempts to recover $446 million from Voyager’s estate. Additionally, Voyager’s lawyers are currently withholding further funds, including $259.6 million set aside for litigation costs, administrative claims, and holdbacks. Customers with any of the 67 supported tokens will be able to withdraw the allotted percentage directly, while a number of digital assets on the platform will be liquidated and returned to their owners.
Although customers may be able to make withdrawals as early as June, Voyager users have expressed disappointment with the liquidation process, citing bankruptcy costs, lawyer fees, and the partial return of crypto assets as key issues. Recognizing the dissatisfaction, the presiding judge acknowledged that the liquidation plan was not ideal but reiterated that it is the only viable path forward.
The Voyager bankruptcy saga has been an ongoing issue since the company filed for bankruptcy protection in July 2022. After initially securing approval to have FTX acquire their assets, the deal infamously collapsed. Next, Binance entered as a potential buyer, offering a staggering $1 billion valuation for Voyager. However, they eventually pulled out of the deal, citing a hostile regulatory climate in the United States as a major obstacle.
Given these complexities and failed attempts at acquisition, the current liquidation process provides a stark contrast to the situation faced by Celsius, a different bankrupt crypto platform, with creditors estimated to receive 70% of their holdings back. Voyager customers can only hope that the final solution will yield a better outcome, but for now, it seems that they will have to accept what is available.
Source: Cryptonews
