Voyager Digital, a crypto lender that has filed for bankruptcy, has revealed its intention to liquidate its assets and cease operations due to the collapse of negotiations to be acquired by FTX or Binance.US.
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In a recent filing made on Friday, Voyager’s legal representatives disclosed that the company’s customers will receive a lower recovery rate of 36% on their crypto holdings, as compared to the estimated 72–73% recovery rate if the company had been acquired by Binance.US.
However, the recovery rate may increase if Alameda Research is unsuccessful in its attempt to reclaim $446 million from Voyager’s estate. Additionally, Voyager’s lawyers have reserved further funds, including $259.6 million, for administrative claims, litigation costs, and other expenses.
Customers who possess any of the 67 tokens supported by Voyager, including major cryptocurrencies like Bitcoin and Ether, will be able to withdraw the allowable percentage of their holdings. Nonetheless, certain digital assets on the platform that cannot be withdrawn will be liquidated and returned to customers, such as Algorand (ALGO), Celo (CELO), and Avalanche (AVAX).
Furthermore, Voyager stated that former customers will soon receive some type of reimbursement, with initial distributions expected to begin within the coming weeks, according to the company’s Twitter account.
Voyager’s legal representatives have stated that there will be a 10-day objection period after the procedures have been filed. If any objections arise, the matter will be brought to a hearing where the court will assess the arguments presented. In the absence of objections, Voyager intends to proceed with its plan promptly.
However, the recovery rate for Voyager customers is significantly lower than expected. In contrast, creditors of Celsius, another crypto platform that has filed for bankruptcy, are projected to receive approximately 70% of their holdings back.
After disclosing its significant exposure to the defunct crypto hedge fund Three Arrows Capital in the previous year, Voyager has been striving to return assets to its investors.
Initially, FTX had received permission from a US bankruptcy court to acquire Voyager’s assets, but the deal soon fell through.
Later, Binance offered to acquire Voyager at a valuation of $1 billion. However, the exchange withdrew from the deal 10 days ago, citing a “hostile” regulatory environment in the United States. Binance.US announced on Twitter at the time:
“While our hope throughout this process was to help Voyager’s customers access their crypto in kind, the hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community.”
Binance’s decision to withdraw from the Voyager deal was influenced by US regulators, including the Securities and Exchange Commission (SEC) and New York’s financial regulator, who had attempted to block the acquisition.
The SEC had argued that the deal might breach regulations on the unregistered offer and sale of securities, while New York’s financial regulator had accused Voyager of operating a virtual currency business within the state without a license, which is illegal.
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