Failed Buyout Attempts Lead to Voyager Digital Liquidation
Crypto lender Voyager Digital has received approval from US Bankruptcy Judge Michael Wiles for its liquidation plan. This is signaling the end of the company’s operations following a failed buyout attempt by Binance US.
The approved program allows Voyager to return approximately $1.33 billion in crypto assets to customers and concludes its reorganization efforts under Chapter 11. Customers may expect to recover around 35% of their cryptocurrency deposits, with the possibility of additional distributions depending on the outcome of future litigation.
Litigation with FTX Impacts Recovery Hopes
Voyager’s customers’ recovery hopes heavily rely on the resolution of ongoing litigation with FTX, which is seeking to reclaim $445.8 million in loan repayments made to Voyager before FTX faced its own bankruptcy. The outcome of this legal battle will significantly impact the final distribution of funds to customers. If Voyager successfully prevails in the FTX litigation, customers’ expected recovery could increase to 63.74%, as indicated by the company’s court filings.
Voyager’s bankruptcy filing in July cited cryptocurrency market volatility and a default on a significant loan provided to crypto hedge fund Three Arrows Capital as contributing factors. Throughout its bankruptcy proceedings, Voyager underwent two unsuccessful sale attempts. Initially, it aimed to sell its assets to FTX for $1.42 billion, but FTX’s subsequent collapse in November derailed the deal. Binance US then stepped in with a $1.3 billion offer but ultimately withdrew from the agreement on April 25 due to concerns about the regulatory climate.
Voyager intends to repay customers using the same type of cryptocurrency they had in their accounts. However, for deposits held in unsupported cryptocurrencies that cannot be withdrawn from Voyager’s platform and for Voyager’s proprietary VGX token, customers will receive repayment in the form of the stablecoin USDC. The company plans to enable withdrawals for customers by June 1, subject to certain conditions.
Voyager’s liquidation and the challenges it faced during its bankruptcy process highlight the volatility and complexities of the crypto industry. The company’s situation is not unique, as several other crypto lenders, including Celsius Network, BlockFi, and Genesis Global Capital, also filed for bankruptcy in 2022 amid the COVID-19 pandemic boom.
How to Recover Crypto Deposits?
Suppose you have cryptocurrency deposits on an exchange like Voyager Digital that is winding down its operations or undergoing bankruptcy proceedings. In that case, there are several steps you can take to recover your funds.
Stay updated on the proceedings and announcements related to the exchange. Follow official communication channels like the exchange’s website, social media accounts, and email notifications.
If the exchange has filed for bankruptcy or is undergoing legal proceedings, familiarize yourself with the process and any deadlines or requirements for filing claims. Consult with a legal professional if needed to understand your rights and obligations. Official creditor committees are often formed during bankruptcy cases. They represent the interests of the creditors and can provide valuable updates and guidance. Stay connected with these committees and provide any required information or documentation they may request.
Unfortunately, cryptocurrency is also susceptible to scams, fake exchanges, and fraudulent brokers. If you have fallen victim to such schemes, there are some steps you can take to potentially recover your lost funds.
Firstly, contact your local law enforcement agency and file a formal complaint. Provide them with all the relevant details, including the name of the scam broker or fake exchange, any communication you had with them, and evidence of your financial losses. Then, inform your country’s financial regulatory authorities about fraudulent activity. They may be able to investigate the crypto scam and take appropriate action against the perpetrators.
Contact your financial institution or payment provider if you have made deposits using a credit card or bank transfer. Explain the situation and see if they can assist you in recovering the funds or reversing the transaction.
Finally, consider engaging in the services of a reputable asset recovery firm specializing in financial fraud cases. They have experience in tracing and recovering funds in complex situations and may increase your chances of retrieving your lost cryptocurrencies. We’re offering a free non-obligatory consultation with our CipherTrace analysts, who can help track and trace your digital coins and find the latest known destination. This can serve as official evidence in a legal dispute.