By
Bena Ilyas
April 29th, 2024
Voyager’s restructuring plan proposed having its customers initially recover 35.7% of their claims in crypto or cash. That was in May 2023. By November, the crypto exchange eventually settled with the FTC for $1.65 billion in monetary relief.
Voyager Digital is making significant headway in its post-bankruptcy bid to repay creditors. As part of its financial recovery efforts, the company has secured $484 million through settlements and claims against FTX, Three Arrows Capital (3AC), and Directors and Officers (D&O) Insurance.
The latest development was shared in a detailed filing by the bankrupt lender that was submitted to the United States Bankruptcy Court for the Southern District of New York. According to Voyager Digital, nearly 92% of the entire recovery fund emanated from an agreement with crypto exchange FTX. That is roughly $450 million. Voyager says that the FTX settlement alone is enough to cater to about 25% of the total creditors’ claim against it, and will be disbursed shortly.
Other than the FTX agreement, Voyager also has a claim of approximately $675 million from the ongoing litigation with 3AC. Of this amount, it has already received $20.43 million representing its share of the initial distribution from 3AC.
However, Voyager expects more payments as more assets get liquidated over time, and it secures more litigation settlements.
With D&O Insurance, Voyager has also obtained a mediation settlement of roughly $14.35 million, adding to the overall creditors repayment fund.
Voyager Digital Still Faces Challenges
While Voyager has recorded impressive strides so far on its financial recovery journey, some issues still persist. For starters, the firm continues to see a huge amount of uncashed checks, numbering up to about 270,000. The uncashed checks translate to nearly $17 million in total value, with most of them valued at less than $25.
Addressing the issue, Voyager has taken a proactive step by announcing a deadline of April 20. The company says that it will void any such checks that remain unclaimed after the date.
Furthermore, there is the issue of a data breach that left some creditors’ information compromised. However, Voyager is also on top of that situation as well. It has partnered with security experts that have identified the source of the breach while investigation continues.
Voyager filed for Chapter 11 bankruptcy in July 2022, just as the crypto market began its downward spiral.
In October 2023, the United States Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) filed parallel lawsuits against former Voyager CEO Stephen Ehrlich for fraud-related statements.
Voyager’s restructuring plan proposed having its customers initially recover 35.7% of their claims in crypto or cash. That was in May 2023. By November, the crypto exchange eventually settled with the FTC for $1.65 billion in monetary relief.