It is not news what has been going on with one of the prestigious crypto brokers Voyager. The company recently filed for chapter 11 which protects the company from its creditors while they explore strategic alternatives.
Account-holders at the bankrupt company shouldn’t expect to get all their crypto back, because it is quite certain that Voyager doesn’t plan to give simply give its users back their crypto assets, at least not all.
In their plan to exit bankruptcy, the company says holders of cryptos should be “impaired” by the chapter 11 process, which means they won’t be getting back exactly what it is they have with them.
The company plans to repay users with some of the crypto they deposited, stock in the newly restructured company, Voyager tokens, and also the money owed to them by Three Arrows Capital. The bankrupt hedge fund owes Voyager more than $650 million.
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Also, according to the statement from Voyager, customers who have US Dollars deposited in their account can reclaim their money “after a reconciliation and fraud prevention process” with Metropolitan Commercial Bank is completed.
Related: Nasdaq Buys More Bitcoin Amid Cryptocurrency Crash
Entangled Crypto with Voyager
According to the statement from Voyager, the company has about $1.3 billion of crypto assets on its platform. The company doesn’t store user assets in appointed wallets for each holder, instead, it mixes deposited crypto into specific asset pots like Bitcoin and Ethereum.
Chief Executive Officer Stephen Ehrlich, made it known in sworn bankruptcy papers that Voyager lends users deposits to third parties to pay interests to its customers, a process that users agree to when they sign up to use the platform.
Ehrlich further said that among those that owed Voyager on account of crypto loans as of the time of bankruptcy include Billionaire Sam Bankman-Fried’s Alameda Research, Mike Novogratz’s Galaxy Digital LLC, and Wintermute Trading Ltd.
Adding the $650 million owed by Three Arrows Capital to Voyager, the total amount of outstanding loans to third parties rises to $1.12 billion. The company has to go through legal proceedings in the British Virgin Islands to get back any of the Three Arrow loans.
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The bankruptcy case number for Voyager Digital Holdings Inc. is 22-10943, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).
