- US bankruptcy court authorizes Voyager Digital to return $270 million worth of funds to customers, WSJ reports
- The company filed for Chapter 11 bankruptcy in July, which left customers unable to access their stashed funds.
Per a report Reported by the Wall Street Journal, bankrupt crypto lending platform Voyager Digital has been given the green light by the US bankruptcy court in New York to return $270 million worth of funds to its customers.
Voyager Digital will refund $270 million worth of money to its customers.
According WSJ Michael Wiles, the presiding judge at the US bankruptcy court said Voyager was able to provide an “adequate basis” to support its argument that customers should have access to the escrow account held at Metropolitan Commercial Bank.
Voyager Digital, a prominent cryptocurrency lender, collapsed earlier this month and filed for Chapter 11 bankruptcy. The bankruptcy revealed how Voyager did not maintain a wallet for each of its customers, but instead used a combined wallet to store all cryptocurrency funds of its customers.
The bankruptcy filing further noted that the platform hosted more than 100,000 creditors at the time, holding funds between $1 billion and $10 billion, with assets and liabilities.
The company had also received an offer from crypto exchange FTX and Alameda Research to buy all of Voyager’s assets and outstanding loans, excluding the defaulted loan it had lent to Three Arrows Capital. The plan involved further liquidating assets and distributing the funds later in USD through the FTX exchange
However, Voyager rejected Alameda’s offer last week, saying the offer did not “maximize value” for its customers.
Per a Bloomberg According to the report, Voyager’s lawyer, Joshua Sussberg, later added how the company had received better deals and offers than the ones proposed by crypto exchange FTX.
Sussberg also stated how the other offers the company had received would allow its customers to earn more than 30 cents on the dollar. Voyager did not provide details on the type of offers it had received earlier.
Voyager’s second presentation also revealed that 88 potential interested parties contacted the company during its restructuring process, in which 46 parties have signed non-disclosure agreements while 22 parties are active in its sales.
According to the report, the deadline for submitting the bid is August 26 and the final hearing for the same will be held on September 7.
Founded in October 2018, Voyager was launched as a digital crypto platform by Stephen Stephen Ehrlich, Philip Eytan and Uber co-founder Oscar Salazer. The company prospered during 2020-2021 by attracting depositors by offering them high interest rates and readily available loans.
However, it collapsed earlier this month, citing the ongoing onslaught of crypto market crises, which left the company dry and unable to return funds to its creditors and customers.