Voyager Digital gives update on recovery plan, reinstating user account access

Must read

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH Richard Adrian · 20 mins ago · ...

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil Liam 'Akiba' Wright · 5 hours ago · 2...

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom Christian Nwobodo · 3 hours ago ·...

Upbit’s parent company Dunamu sees profit drop 76% in Q3

Upbit’s parent company Dunamu sees profit drop 76% in Q3 Soumen Datta · 6 hours ago · 1 min read...

Voyager Digital gives update on recovery plan, reinstating user account access Voyager Digital gives update on recovery plan, reinstating user account access Samuel Wan · 4 hours ago · 2 min read

A restructuring plan is in full swing which includes the return of users’ funds, but some have reacted angrily to the pro-rata element.

2 min read

Updated: July 12, 2022 at 11:07 am

Voyager Digital gives update on recovery plan, reinstating user account access

Cover art/illustration via CryptoSlate

Voyager Digital said it’s working as quickly as possible to open user account access in an update posted on July 11.

The CEO of investment platform BnkToTheFuture, Simon Dixon, commended the communication reassuring for Voyager Digital users.

BnkToTheFuture is an investor in Celsius Network, which also froze user accounts amid challenging market conditions. Due to its poor and infrequent communications, the troubled crypto lending and borrowing platform had been widely criticized for adding to user distress.

When you are distressed and close withdrawals you need to communicate like a public company https://t.co/84DeY0rgwn

— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) July 12, 2022

According to Voyager Digital’s update, a company reorganization is in full swing, and users will receive their money back, but not in a single payment and perhaps not in the form it was deposited.

Voyager Digital is restructuring its business

On July 5, Voyager Digital filed for Chapter 11 bankruptcy in the Southern District of New York. This type of bankruptcy enables the company to stay operational while executing a recovery plan.

In an update, the company said users will get their funds back, “subject to a reconciliation and fraud prevention process.”

“Customer cash belongs to you and will go back to you, subject to a reconciliation and fraud prevention process. All customer cash is held in a customer account at Metropolitan Commercial Bank and is equal to the amount of cash in Voyager accounts.

It added that the USD cash equivalent of customers’ funds is held with Metropolitan Commercial Bank in a “For Benefit of Customers” (FBO) account.

Voyager Digital further disclosed that crypto-assets come in at approximately $1.3 billion, plus a $650 million debt owed by Three Arrows Capital (3AC).

A court filing shows that the whereabouts of 3AC founders Zhu Su and Kyle Livingstone Davies are unknown. It’s also emerged that the pair are not cooperating with authorities regarding the company’s bankruptcy process.

It is unclear whether Voyager Digital can recover the $650 million debtor balance from 3AC.

Pro-rata payments are not popular

Under the restructuring plans, Voyager Digital proposes customer funds be returned through a combination of the below, with users able to choose the proportion of crypto and common equity received, subject to maximum thresholds:

  1. Pro-rata share of crypto;
  2. Pro-rata share of proceeds from the 3AC recovery;
  3. Pro-rata share of common shares in the newly reorganized company; and
  4. Pro-rata share of existing Voyager tokens.

The maximum thresholds have not been disclosed at this time, and the plan is subject to court approval.

Social media feedback has been mixed so far, and a common complaint is that the return of funds should not be on a pro-rata basis.

More articles

Latest article

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH

Bitfinex holds the highest amount of Tether(USDT) at 60%, exchange balances surpass ATH Richard Adrian · 20 mins ago · ...

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil

Gemini reveals $601M GUSD backing, 45+ licenses amid global exchange turmoil Liam 'Akiba' Wright · 5 hours ago · 2...

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom

CryptoSlate Wrapped Daily: Ethereum losses deflationary gains; Andre Cronje reveals how DeFi saved Fantom Christian Nwobodo · 3 hours ago ·...

Upbit’s parent company Dunamu sees profit drop 76% in Q3

Upbit’s parent company Dunamu sees profit drop 76% in Q3 Soumen Datta · 6 hours ago · 1 min read...

Research: Whales have been offloading Bitcoin since 2021

Research: Whales have been offloading Bitcoin since 2021 Zeynep Geylan · 6 hours ago · 2 min read ...