Voyager's clients now have the chance to regain $270 million in funds, as per the latest ruling from the bankruptcy court.
Voyager Digital’s recent troubles further illustrate the challenges within the crypto market. In July, it became the second prominent firm to file for bankruptcy, shortly following other high-profile failures. Three Arrows Capital According to reports, Voyager had disclosed liabilities amounting to $661 million in their filings.
Unlike those guys Voyager Digital is diligently attending their court proceedings for the benefit of their customers. Last Thursday, they received approval from Judge Michael Wiles of the U.S. Bankruptcy Court in New York to redistribute $270 million of Voyager’s previously frozen assets back to the customers. Voyager's attorney, Joshua Sussberg, had previously requested $350 million in mid-July.
Judge Wiles found adequate justification to support Voyager's assertion that its customers should regain access to their funds held in Voyager’s custodial account at Metropolitan Commercial Bank. The bank confirmed that Voyager had approximately $270 million in that account at the time of their filing. bankruptcy .
Per the Wall Street Journal , Voyager’s platform Voyager is sitting on $1.3 billion worth of digital assets. Until the court's ruling on August 4, those assets were regarded as belonging solely to the bankruptcy estate, to be distributed among the creditors based on the decisions of the bankruptcy process that is currently unfolding.
Decrypt Recent disclosures revealed that Voyager's bankruptcy filings indicated an overwhelming 100,000 creditors, with assets between $1 and $10 billion, reflecting a similar range for their liabilities. paperwork They provided a detailed account of their principal fifty investors. Given these staggering figures, one must seriously question whether the returned $270 million will be sufficient. Alameda Research was notably mentioned, and their founder, Sam Bankman-Fried, actively intervened early on, providing $75 million when the crises erupted.
The collapse of Voyager mirrors the broader decline in the crypto market, which spiraled downward as major players like Terra and Luna fell apart. Their downfall caused vast amounts of wealth to vanish, leading to a bank run at Voyager. As they sought to borrow from troubled companies such as 3AC, the situation only worsened. Terra Market fluctuations are a common reality, yet this series of collapses has sparked significant doubts regarding the concept of 'decentralization' in the crypto space. It raised the critical question: who would absorb the losses amidst a liquidity crisis? Reports from Decrypt highlighted that Galaxy Digital owed Voyager $34.4 million, while Genesis had a debt of $17.5 million, both grappling with their own exposures to 3AC and Terra. Galaxy Digital , those firms couldn’t make good.
Decrypt scrutinized Voyager’s potentially 'excessive' rewards program that incentivized customers with $100 in crypto bonuses alongside appealing interest rates to celebrate partnerships with the Dallas Mavericks.
The recent upheavals in the crypto landscape have reignited longstanding discussions about investor accountability. The Wall Street Journal pointed out that investors are beginning to realize just how limited their control is over their funds and that full recoveries through bankruptcy court may not be feasible. customer rewards Celsius stated that their agreements with users explicitly grant them the authority to lend, sell, or transfer deposits at any time. This is in stark contrast to traditional banking protections offered by the FDIC. As the legal situation unfolds, Celsius is exploring creative strategies, even resorting to mining Bitcoin to settle debts.
A report from the Wall Street Journal revealed that 'Voyager customers have penned letters to Judge Michael Wiles’, requesting him to ensure that Voyager promptly releases their funds held at Metropolitan Commercial Bank. The remaining concern is now how much they will eventually recover—and in what form and timeframe.
Celsius epitomized the problem. As WSJ wrote on July 14 In a recent statement, Voyager announced that they have initiated a voluntary financial restructuring process aimed at safeguarding the assets on their platform, maximizing value for all stakeholders, particularly their customers, and striving to emerge as a more resilient company. Operations will continue as they navigate this process.
Following Voyager's bankruptcy filing on July 2, CEO Stephen Ehrlich took to Twitter, clarifying that customers with crypto in their accounts would receive a mix of assets comprising the crypto they held, proceeds from the recovery from 3AC, and common shares of the newly reorganized company. July 15 They developed a necessary reorganization plan and sought permission to liquidate crypto assets in accounts that displayed negative USD balances.
In a bold move during the prevailing bear market, another entity is advancing in the competitive landscape; they acquired BlockFi last month and plan to integrate some of Voyager's assets and client accounts once the anticipated sale occurs in September. tokens For Voyager customers not listed among the top fifty creditors, the wait continues alongside everyone else to discover the fate of their accounts.
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Moving forward, uk Blockchain company 5ire has reportedly secured $100 million in funding, achieving unicorn status.
Three Arrows Capital’s precarious financial situation has resulted in a $270 million setback for Blockchain.com.
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