After Voyager Digital filed for bankruptcy protection on Tuesday, the crypto lending firm said its recovery plan was aimed at preserving customer assets, but did not explicitly state that it would be able to return all matching funds to affected users.
In a Monday blog, Voyager said it had approximately $1.3 billion in affected user funds, in addition to $650 million of “claims against Three Arrows Capital” – referring to the loan of 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) that the company did not payment. Under Voyager’s proposed recovery plan – subject to court approval – users could receive a combination of Voyager tokens, cryptocurrencies, “common stock of the newly reorganized company” and funds from any proceeding with Three Arrows Capital, or 3AC.
“The exact figures will depend on what happens in the restructuring process and the recovery of 3AC’s assets,” the loan company said. “The plan is subject to change, negotiation with clients and ultimately a vote […] We put together a restructuring plan that would preserve clients’ assets and offer the best opportunity to maximize value.”
Voyager,
We understand how critical it is to get access to the value in your account and we are working through this process as quickly as possible to do just that. Today’s post provides an update on customer cash and crypto, and next steps: https://t.co/yBlVB0qgVp (1/6)
— Voyager (@investvoyager) July 11, 2022
In addition to crypto assets, Voyager said it held funds “equal to the dollar amount in customer accounts” in a special FDIC-insured account at the Metropolitan Commercial Bank of New York. FDIC protection guarantees up to $250,000 per customer in the event the bank defaults, not the lending company. Voyager added that it was “working to restore access to dollar deposits,” subject to a fraud prevention and reconciliation process.
Voyager issued a notice of default to 3AC on June 27, subsequently citing the company’s non-payment as one of the reasons for suspending trading, deposits, withdrawals and loyalty rewards. The lending firm also announced that it had borrowed 15,000 BTC – roughly $500 million at the time – from Alameda Research, claiming that the funds were intended to cover losses incurred as a result of 3AC’s default.
In addition to the legal solutions that Voyager is exploring with the 3AC reimbursement, the company said it was “looking at various strategic alternatives to assess the value of the stand-alone company compared to a third-party investment or sale.” Data from TradingView shows that the company’s share price is down more than 98% from its yearly high of $20.35 in November 2021, reaching roughly $0.27 at press time.
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