After negotiations with Binance and FTX fell through, Voyager Digital announced that it would be closing its doors and liquidating its assets.
Voyager Digital Throws in the Towel, Announces Liquidation Plans
Cryptocurrency lender, Voyager, has revealed that its unsuccessful acquisition talks with Binance and FTX will result in customers receiving only 36% of their money back. The company’s estate is also being pursued $446 million by Alameda Research, and if unsuccessful, the rate at which customers receive their money back could be further reduced.
Voyager’s legal team also withholds $259.6 million to cover litigation expenses, administrative claims, and other costs. In addition to the money, the company will return liquidated digital assets held on the platform that can no longer be withdrawn.
Initial disbursements are expected to begin in the coming weeks, giving some relief to Voyager’s previous consumers. However, there will be a 10-day timeframe for raising any concerns after filling the positions. If any challenges are presented, the court will hold a hearing to consider the evidence. If there are no concerns, Voyager will proceed quickly to implement its plan.
Voyager’s customers face a much lower chance of receiving their money back than other defunct cryptocurrency exchanges like Celsius, expected to pay out around 70% of creditors’ holdings. Nonetheless, Voyager’s disclosure relieves customers waiting for news about their assets.
The Collapse of Voyager Digital’s Acquisition Plans
Since declaring bankruptcy in July 2022, Voyager has had a rough go of things because of a significant loan position default by Three Arrows Capital. Since then, Voyager has been hard at work redistributing investor funds.
Before its collapse in October 2022, FTX won the auction to acquire Voyager’s assets. Following that, Voyager was presented with an offer from Binance.US, which it stated was the most superior bid for its assets after reviewing strategic alternatives with the primary aim of maximizing the returns to customers and other creditors in a swift manner.
Despite this, Binance.US ran into significant resistance from the Securities and Exchange Commission and the Committee on Foreign Investment in the United States throughout its pursuit of regulatory permission. The $1 billion agreement fell through after the exchange terminated it last month, citing an unfriendly regulatory environment.
Although Voyager is troubled by the turn of events, it is committed to doing what it can to help its consumers. 0The cryptocurrency lender has been exploring other options to return funds to customers and creditors quickly.
Final Thoughts
Voyager’s bankruptcy and failed acquisition bids highlight the cryptocurrency industry’s regulatory challenges. As the industry continues to grow and evolve, it will be necessary for companies to navigate regulatory requirements effectively and provide reliable services to their customers.