- The U.S. Bankruptcy Court has approved Voyager Digital to repay $270 million worth of funds to its customers, according to the Wall Street Journal
- The company had filed for Chapter 11 bankruptcy in July, leaving customers without access to their stored funds.
Every Report Bankrupt cryptocurrency lender platform Voyager Digital, published by the Wall Street Journal, has received a green signal from the U.S. Bankruptcy Court in New York to return funds worth $270 million to customers.
Voyager Digital will return funds worth $270 million to its customers.
according to Wall Street Journal Presiding Judge Michael Wiles of the U.S. Bankruptcy Court said Voyager was able to provide “sufficient grounds” to support its argument that customers should be allowed access to escrow accounts held at Metropolitan Commercial Bank.
Prominent cryptocurrency lender Voyager Digital collapsed earlier this month and filed for Chapter 11 bankruptcy protection. The bankruptcy filing revealed that instead of maintaining a wallet for each customer, Voyager used a hybrid wallet to store all of its customers’ cryptocurrency funds.
The bankruptcy filing further stated that the platform had more than 100,000 creditors at the time and held funds between $1 and $10 billion, including assets and liabilities.
The company also received takeover offers from cryptocurrency exchanges FTX and Alameda Research to purchase all of Voyager’s assets and outstanding loans, excluding its defaulted loan to Three Arrows Capital.The plan also includes liquidating assets and later distributing funds in USD via the FTX exchange
However, Voyager last week rejected Alameda’s offer on the grounds that it did not “maximize value” to its customers.
Every Bloomberg Voyager’s attorney, Joshua Sussberg, later added how the company received better bids and offers than those offered by cryptocurrency exchange FTX, the report said.
Sussberg also said how other offers the company has received will allow its customers to earn more than 30 cents per dollar. Voyager did not provide any details about the type of bids it received earlier.
Voyager’s report the next day also disclosed that 88 potential stakeholders contacted the company during the restructuring, of which 46 signed nondisclosure agreements and 22 were actively involved in its sales operations.
According to the report, the deadline for bids is August 26, and a final hearing will be held on September 7.
Founded in October 2018, Voyager was launched as a digital encryption platform by Stephen Stephen Ehrlich, Philip Eytan and Uber co-founder Oscar Salazer. The company thrived in 2020-2021 by enticing savers with high interest rates and readily available loans.
However, it collapsed earlier this month, citing the continued shock of the crypto market crash, which left the company dry and unable to repay creditors and customers.