Court records from this week indicate that some Voyager Digital clients may be able to recover some of their money. Under a tentative agreement with FTX US, an authorized cryptocurrency exchange in the United States, customers may be able to obtain over 70% of the original value of their accounts.
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FTX offers Voyager customers an expedited refund methodFTX offered Voyager Digital clients to open accounts on the exchange, which will accumulate proceeds from their claims for bankruptcy of the
☟︎︎︎read a branch☟︎︎︎ pic.twitter.com/2RC6B88jKy— 𝚂𝚅𝙴𝚃𝙻𝙰𝙽𝙰 𝚂𝙼𝙰𝚁𝚃 (@SmarttSvetlana) August 1, 2022
Voyager’s creditors must consent before the tentative agreement is formalized, said US bankruptcy judge Michal Wiles during a court hearing. In the event that the proposed sale does not go through, “none of the components of this arrangement will survive.”
What will be the refund process like?
Following the current agreements, FTX US will provide full payment to all priority claims, allowing the remaining clients to recoup more than 70% of their holdings. There has been a freeze on the funds kept in the accounts of the insolvent cryptocurrency lender since July 1.
/2 🤝 Troubled crypto lender @Voyager secured court approval to refund $270M, says it received better offers than FTX bid
💸 @LongHashVC launched second fund for $100m to support web3 infrastructure
— web3 Studios (@web3_Studios) August 12, 2022
The company’s challenges began four months ago when, due to cash flow issues, it filed for Chapter 11 bankruptcy on July 4. A bitcoin hedge fund called Three Arrows Capital has already filed for bankruptcy due to default.
While FTX US won the competition to buy Voyager Digital’s crypto assets, the $1.4 billion deal is still in its infancy. A “fiduciary out” provision would allow Voyager to revoke current agreements if any firm other than FTX submitted an offering that would benefit existing creditors better than FTX.
Business owners often use it when this type of situation arises, allowing them to find better bids before the transaction is completed.
FTX offers a lifeboat to the sinking ship Voyager; investors will receive a refund on their investments. https://t.co/oVRGmooDSC
— kogocrypto (@kogocryptos) July 24, 2022
The FTX US platform will be available to Voyager customers regardless of how the agreement is ratified. The insolvent New York-based cryptocurrency lender funded approximately 1.19 million accounts as of March 2021.
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