Voyager's Liquidation Gets the Nod from US Court

The liquidation plans of Voyager Digital, a bankrupt crypto lender, have been authorized by a United States bankruptcy court. This approval, given by Judge Michael Wiles during a Manhattan hearing, allows Voyager to conclude its Chapter 11 reorganization efforts, as stated in court documents.

Voyager's legal team had previously announced that the company would undertake a self-liquidation process and cease operations after Binance.US withdrew from a proposed $1 billion acquisition of Voyager's assets. While the American branch of the prominent cryptocurrency exchange did not disclose a specific reason for backing out, it alluded to “the hostile and uncertain regulatory climate in the United States.”

Following the collapse of Terra-LUNA, which had a profound impact on the global cryptocurrency industry, Voyager filed for bankruptcy protection in July of the previous year. Prior to its downfall, the crypto lender had sent a default notice to Three Arrows Capital (3AC), based in Singapore, due to the latter's failure to make payments on a crypto loan exceeding $670 million. However, 3AC also faced challenges amidst the market downturn and was subsequently ordered by a court in the British Virgin Islands to liquidate its assets.

Furthermore, in September of the same year, FTX's US affiliate had initially secured a $1.4 billion agreement to acquire Voyager Digital's assets. However, the deal collapsed the following month following FTX's own financial difficulties.

In the latest court filing, Voyager Digital stated that it anticipates refunding approximately 35% of its customers' crypto deposits as part of the planned liquidation. According to Reuters, Judge Wiles' approval enables the bankrupt crypto lender to return around $1.33 billion worth of crypto assets to its customers.

Conversely, FTX, also facing bankruptcy, is actively pursuing the recovery of approximately $445.8 million in loan repayments made to Voyager prior to its demise. A successful outcome for Voyager in the litigation could potentially result in a higher recovery rate of 63.74% for its customers, as outlined in the court filing.