Voyager Digital Approved To Repay $270M To Customers
- Voyager Digital Holdings Inc. has recently obtained approval to return $270 million in user cash according to a report from WSJ
- The United States Bankruptcy Court of New York’s Judge Michael Wiles had greenlit the firm on Thursday with support from Metropolitan Commercial Bank
Crypto winter-troubled crypto brokerage firm Voyager Digital Holdings Inc. has recently obtained approval to return $270 million in user cash. The approval settled one of the biggest issues the company had been facing since its bankruptcy filing.
On Thursday, the United States Bankruptcy Court of New York’s Judge Michael Wiles, who is overseeing Voyager’s filing, ruled that the firm has provided a “sufficient basis” to support its argument that its customers should be allowed access to the custodial account held at New York-based Metropolitan Commercial Bank. Notably, the firm had $270 million in that account at the time of its bankruptcy filing on July 6, 2022.
In recent weeks, the crypto firm has been stressing about getting permission to honor user withdrawal requests for funds held in custody at Metropolitan Commercial Bank. However, the company said that around $1.3 billion in crypto assets on its platform belong to the bankruptcy estate and will be distributed among all creditors through the bankruptcy proceeding.
Severely hit by the crypto storms, Voyager Digital announced the temporary suspension of all trading, deposits, withdrawals, and loyalty programs for users on July 1, 2022. As the company faced a flood of requests by customers to allow them to withdraw their funds soon after the suspension, it sought bankruptcy protection, facing a “run on the bank.” On July 6, the firm commenced voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York along with its U.S. affiliates.
The business stated that it plans to complete the sale process by September 2022. In July, FTX Trading Ltd., owned by billionaire Sam Bankman-Fried, made an offer to buy some of Voyager’s crypto assets in exchange for the right for Voyager clients to use the proceeds to register accounts on the FTX platform. Under the terms of the proposal, Voyager customers would have the opportunity to open accounts on FTX with opening cash balance covered by an early payout on a percentage of their bankruptcy claims.
However, Voyager rejected the offer later in July, calling the offer a “low-ball bid dressed up as a white knight rescue” that only benefited the exchange.
On Thursday, Voyager’s attorney, Joshua Sussberg, said in court that FTX’s offer is the lowest of numerous bids and that Voyager is negotiating with FTX to reach a higher offer.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
