As the troubled cryptocurrency brokerage Voyager Digital continues through with its restructuring plans, consumers may not be able to get all of their crypto assets in full.
Voyager began a voluntary Chapter 11 bankruptcy procedure on Friday in order to build an effective strategy for unfreezing customers’ accounts and money. Financial difficulties stemming from the significant market volatility and a loan to the crypto hedge fund Three Arrows Capital (3AC) had previously resulted in the firm freezing its clients’ assets by stopping all trading activity.
Users will receive a pro-rata share of crypto, pro-rata share of 3AC recovery proceeds, pro-rata share of common shares in the newly reorganized company, and pro-rata share of existing Voyager tokens under the restructuring plan, which is subject to change and requires court approval before implementation.
Nonetheless, Voyager emphasized that the precise quantity of crypto assets that consumers might expect to receive is heavily dependent on Voyager’s restructuring strategy and the recovery of its finances from 3AC.
The firm is also working on cash withdrawals. An FDIC-insured bank, the Metropolitan Commercial Bank of New York, is where clients’ savings are held, according to the company. Upon completion of a reconciliation and fraud protection procedure, consumers will have access to their USD deposits, according to the crypto broker.
An estimated 1.3 billion dollars worth of digital assets, including $650 million in claims against 3AC, are held by the American crypto platform.
According to Voyager’s June disclosure, the company has $660 million in 3AC exposure, which includes $350 million in USDC stablecoin and 15,250 BTC worth around $311.8 million.
Voyager sought that 3AC return its debts that the VC failed to satisfy during the peak market slump that significantly harmed 3AC. The hedge fund received a notice of default from the crypto broker. Voyager vowed to continue its efforts to recover the monies from the ailing corporation.