September 25, 2023

The US Bankruptcy Court in New York ruled on August 4 that Voyager had provided a “sufficient basis” to support its claim that customers should have access to some of their funds.

A custodial account held at Metropolitan Commercial Bank (MCB) contains at least $270 million in cash that the company disclosed when it filed for bankruptcy. The company has now been given the green light to return those funds to its customers, settling one of the most significant issues it has faced, according to WSJ.

Voyager Digital suspended withdrawals in early July due to bad debt raised by Three Arrows Capital (3AC). The company filed for Chapter 11 bankruptcy on July 5, saying at the time that it had $350 million in cash in the For Benefit Of (FBO) account for customers at MCB.

Suspension for some

Like many beleaguered crypto brokers and lenders, Voyager faced a bank administration situation as customers rushed to withdraw their funds amid the crypto market crash.

The company requested the release of cash held by the bank, but said the estimated $1.3 billion in crypto assets on the platform belonged to the bankruptcy estate to be shared by all creditors.

Voyager aims to complete a sale by September and has already rejected offers from FTX boss and cryptocurrency billionaire Sam Bankman-Fried. At the end of July, SBF attacked the company, claiming it still had 75% of its assets and the affected customers had not yet been compensated.

A few days later, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) accused Voyager of misleading customers by falsely claiming they were covered by FDIC insurance.

This week’s approval to release funds will provide some reprieve for those who have seen assets frozen by central companies during the ongoing crypto winter.

Crypto markets on the side

Crypto markets remain range-bound with very little movement in either direction over the past 24 hours. Total market capitalization remains at $1.1 trillion and core assets are consolidated at current levels.

Bitcoin is steady on the day at a touch above $23,000, while Ethereum is trading at $1,664, where it was yesterday.

The only cryptocurrency in the top ten to make a move is Binance Coin, with BNB up 4.2% to $313 at the time of writing. The company just announced a partnership with Mastercard to provide prepaid crypto cards in Argentina.

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