Voyager approved to return $270 million in fiat deposits to customers

The platform will also divide all blocked crypto assets worth $1,3 billion among its creditors

05.08.2022 - 07:30

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2 min

What’s new? The US court has granted the bankrupt crypto broker Voyager Digital the approval to return $270 million in fiat deposits to customers. According to The Wall Street Journal, Judge Michael Wiles ruled that the company presented a “sufficient basis” to support that customers should be allowed access to the deposit account at Metropolitan Commercial Bank. The bank noted that the company had about $270 million in its accounts at the time of the bankruptcy filing.

The Wall Street Journal’s material

How did events develop? Voyager unveiled a compensation plan on July 11. Back then the platform’s representatives noted that the bankrupt hedge fund Three Arrows Capital (3AC) owed the company more than $650 million. Under Voyager’s restructuring plan, payments to cryptocurrency depositors will be made in equal shares due to proceeds from the repayment of 3AC’s loan, common shares in the reorganized company, and cryptocurrencies in the brokerage’s accounts. The proposal will also require court approval.

The company noted that all of the digital assets on the platform, worth about $1,3 billion, would be split and go to cover debts to creditors. The distribution will be decided in bankruptcy proceedings. The company added that it plans to complete the debt recovery process by September.

Earlier the US Federal Deposit Insurance Corporation (FDIC) demanded Voyager remove information from its resources that customers’ funds were insured by the FDIC. Thus, the broker claimed that customer funds were covered by FDIC insurance through Voyager’s partnership with Metropolitan Commercial Bank. However, MCB said that FDIC insurance coverage is only due to the broker’s customers in the event of bankruptcy of the bank itself, not Voyager’s bankruptcy.

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