Voyager was allowed to return frozen customer funds

Users will receive about 36% of repayments, while the amount may increase if the broker reaches an agreement with FTX

18.05.2023 - 08:25

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3 min

What’s new? Bankrupt crypto broker Voyager Digital received court approval to wind down its operations and begin repaying customers a portion of their cryptocurrencies that have been stored on the platform since it stopped operations in July 2022. Judge Michael Wiles approved Voyager’s liquidation on May 17, less than a month after the Binance.US exchange turned down a $1 billion purchase of the broker’s assets. Customers will receive 35,72% of the amount owed, with the payout likely to increase if Voyager reaches a settlement with the bankrupt crypto exchange FTX, according to court documents.

Bloomberg’s material

What else is known? The judge explained that Voyager is on the path of termination of business because it does not have enough money to fully repay users. Options that could have increased the amount of funds available for reimbursement, namely selling to the FTX or Binance.US exchanges, did not work. He added that customers were unhappy with the liquidation and the fact that they would only get back a percentage of their crypto assets.

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According to a May 5 court filing, Voyager’s customer claims total $1,8 billion, with only $630 million in assets held by the broker. Users have the option of receiving repayments in cryptocurrencies or fiat. As recently as last year, customers began selling claims on Voyager at a discount of up to 60%, fearing lengthy litigation that would not guarantee a refund of a similar amount.

Late last September, FTX won the auction for the sale of Voyager’s assets with a bid of $1,42 billion, but less than two months later went bankrupt itself. As part of its bankruptcy proceedings, new management demanded that Voyager pay back $446 million. That amount was borrowed from the broker by hedge fund Alameda Research as part of the FTX Group and paid in full on the eve of the group’s collapse. In March, the broker agreed to reserve that amount, andthe court approved the parties’ agreement.

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