Voyager Digital Seeks Bankruptcy Court’s Approval To Honor Withdrawal Requests
- Voyager Digital has asked for the federal bankruptcy court’s approval to honor user withdrawals
- A hearing has been scheduled for August 4 at 11:00 a.m. Eastern Time.
Troubled crypto broker Voyager Digital has recently requested permission from the federal bankruptcy court to honor user withdrawals for over $350 million held by New York State-based Metropolitan Commercial Bank.
A court document filing from Thursday reveals that Voyager is seeking the court’s permission to honor withdrawals for the funds held by Metropolitan Commercial Bank in a For Benefit of Customers (FBO) account, as per Wall Street Journal.
Notably, on July 6, the company said in a statement that it had around $1.3 billion in crypto assets on the platform. Moreover, it held over $350 million in the bank. It also stated that it has claims against the Singapore-based cryptocurrency hedge fund Three Arrows Capital exceeding $650 million, featuring 15,250 Bitcoin (BTC) and $350 million in USDC.
It is important to note that Voyager sent 3AC a notice of default in June. Voyager Digital stated at the time that its legal team was working with the company’s advisors to evaluate the appropriate course of action due to 3AC’s inability to repay the loan.
“The debtors have determined, in their business judgment, that failure by the debtors to honor withdrawals any longer could materially harm customer morale during these Chapter 11 cases,”
July 14’s filing by Voyager with the US Bankruptcy Court for the Southern District of New York reads.
It went on to add that providing the withdrawal access to users “will alleviate customer concerns that access to their cash held in the [Metropolitan Commercial Bank] accounts, and the integrity of the platform.” The company is waiting for the hearing scheduled for August 4, 2022, at 11:00 am ET.
Voyager Digital needs permission for much more
Moreover, the court filings reveal that Voyager also wants permission to carry out other financial operations, including liquidating crypto from user accounts with negative balances, conducting “ordinary course reconciliation” of the user accounts, continuing crypto staking services, liquidating “sweep cash” held in third-party exchanges, and taking multiple relief measures.
Notably, early in July, Voyager Digital announced a temporary suspension of trading, deposits, withdrawals, and loyalty rewards on its platform. Soon after the withdrawal pause, the company filed for Chapter 11 bankruptcy protection on July 5.
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.
