The aftermath of the bankruptcy filing a year ago by Voyager, a crypto platform, in July 2022 serves to accentuate the quasi-paradox of the crypto world. A fertile breeding ground for speculation and innovation, this lane of finance is often beset by regulatory floodlights which, while ensuring compliance and safety, can be financially strenuous, running into massive amounts. This contrast unfurls in the tale of Voyager’s downfall and the accompanying legal costs, mounting to a whopping $16.4 million.
Preceding Voyager’s collapse, seven US states had raised red flags, issuing cease-and-desist letters to the company under allegations of unregistered securities offering. Following the bearish wave sweeping the crypto market and the collapse of the Terra blockchain, Voyager saw no escape route. Their creditors, who found themselves unsecured in the aftermath, approached McDermott Will & Emery for legal representation.
While the initial restructuring process estimated costs around $11.2 million, escalating complexities tethered to the deal with FTX resulted in the actual figure jumping up to $16.4 million. The failed arrangement to sell Voyager’s assets to FTX, and the subsequent fallout, necessitated extensive legal services, causing the previous estimate to flounder.
Detailing the spend, the law firm’s invoice revealed an amount of $1 million for nearly 1,000 hours of work dedicated to creating a plan and settlement disclosure. This exorbitant figure draws the loudest gasps when one compares it to the $1.1 million Voyagers had to pay to Kirkland & Ellis, their own legal representation.
The legal squabbles in the crypto terrain gained momentum in 2022 when major players like Voyager were seen tumbling down, setting off a domino effect across the financial board. This, coupled with heightened regulatory oversight, brought countless companies and individuals under the courtroom’s gaze. The result was a windfall for law firms – FTX paid over $200 million in legal costs, and Celsius forked out an additional $50 million.
Thus, the story of Voyager and its financial travails throws into sharp relief the two-fold aspects of the crypto transactions. While the platform has opened up high-potential ventures, its volatility and regulatory thorns present hard-to-ignore challenges thereby raising vital questions related to the future of this burgeoning space. A blueprint balancing forward-thinking and fiscal safety is perhaps the next stop in this unpredictable flight of crypto world.
Source: Cryptonews
