Judge Michael Wiles Approves Voyager Digital’s Liquidation Plan after Several Failed Acquisition Attempts

Bankrupt crypto lender Voyager Digital announced on Wednesday that its customers will recover about 35 percent of their initial deposit amid its liquidation plan. The failed crypto lender attempted to restructure its business operations through Chapter 11 bankruptcy protection but the customers pushed for a total liquidation. As a result, Voyager Digital attempted to sell its products severally but failed due to technical difficulties.

At one time, Voyager Digital assets were to be acquired by FTX exchange for about $1.42 billion but failed after the latter also succumbed to poor leadership. Recently, Binance.US was stopped from acquiring Voyager Digital assets for about $1.33 billion after the SEC succeeded in convincing the court that the exchange could be offering unregistered securities.

As a result, Judge Michael Wiles approved Voyager Digital’s liquidation plan on Wednesday.

However, Voyager Digital expects its customers to receive higher payouts if the lender succeeds in a pending dispute with FTX. Notably, the current FTX officials led by CEO John Ray III filed a lawsuit to claw back about $445.8 million in loan repayments made to Voyager before the exchange went bankrupt late last year.

Voyager Digital customers expect to receive a payout of about 63.74 percent of their Raphael deposits if the crypto lender succeeds in the litigation against FTX. According to court filings, Voyager Digital customers can expect to be repaid in the same type of cryptocurrency that they had deposited in their accounts.

However, the company noted that customers that deposited illiquid crypto tokens including its native coin VGX, will be repaid in Circle USDC.

Closer Look at Voyager Digital

Founded back in 2018, Voyager Digital had amassed more than 3 million customers before filing for bankruptcy last year. In June last year, Voyager Digital announced that Three Arrows Capital had not repaid loans totaling more than $660 million. Notably, Three Arrows Capital (3AC), a Singapore-based crypto hedge fund – fund, was ordered by a court in the British Virgin Islands to liquidate its assets last year after the firm lost most of its capital in risky trades.

Earlier this month, Voyager Digital announced that it has about $1.334 billion in assets which equates to 75.68 percent of the aggregate value of the customer claims. The rest include holdbacks in the ongoing FTX litigation amounting to $445 million, the winding down legal cost amounting to $135.6 million, administrative tax amounting to about $50 million, and miscellaneous fees of about $74.1 million.

The company noted that its customers can wait for the Voyager app to begin requesting paybacks, which will take place in 30 days.