Magnolia spoke during the hearing to reveal she had amassed over $1 Million trapped on Voyager platform after saving it over 24 years to cover college tuition for her children.
FTC alleges that Voyager Digital misled consumers by falsely representing that their funds were safe. According to Voyager Digital’s claim that USD deposits are insured with Metropolitan Commercial Bank instead of FDIC coverage (the latter only covers cash).
FTX’s bankruptcy
FTX’s bankruptcy marks a serious setback for the crypto industry. Their collapse has provoked lawsuits and regulatory investigations against founder Sam Bankman-Fried, while criminal and civil charges may follow as a result of his actions.
Bankman-Fried released a blog post explaining his innocence, blaming the collapse of his business on an overall downturn in crypto markets.
However, he remains responsible for Voyager Digital’s bankruptcy. He has been charged with fraud, securities violations and money laundering and faces up to 10 years in prison if found guilty. Reorganization could take five years but should be completed by 2020, giving customers some assets back from when Voyager Digital collapsed; however investors and shareholders may not get compensated accordingly – perhaps by selling some or all remaining assets such as Algorand (ALGO) and Celo (CELO). Furthermore, US FTC awarded Voyager Digital with an enormous $1.65 billion settlement for misleading statements made regarding customer fund safety claims made before collapse – this should enable customers to recover some assets lost during this process while investors and shareholders to recover some assets; investors and shareholders could receive their due share from such proceeds sale proceeds; investors/shareholders to make up any shortfall they might incur from selling those left over from former crypto firm collapse; therefore Voyager Digital received from selling those remaining assets including tokens for sale of Algo/CELO coins as the US FTC awarded Voyager Digital with $165 billion settlement for misleading statements made regarding customer fund safety claims made about that firm collapse.
FTX’s settlement
As part of its bankruptcy proceedings, FTX has reached an $874.5 million settlement with BlockFi, one of its creditors. The agreement includes plans to return burned tokens and prioritize customer claims repayment – yet many former FTX users aren’t pleased with how their claims were valued.
Court filings indicate that this agreement settles BlockFi’s $1 billion of customer claims against FTX and Alameda Research as well as approximately $689 million of unsecured debt claims against these two firms.
This lawsuit alleges that FTX misled consumers by promising that their funds would be safe from fraud and breached its own terms of service by transferring investor money between affiliated entities. These allegations may prove difficult to settle; as part of this legal battle, compensation for the victims and an evaluation of how valuation processes applied in this particular instance will need to be determined by a judge before their claims can be settled. Additionally, this lawsuit requests reevaluation of valuation processes used against this case as well.
FTX’s reorganization
FTX and other troubled crypto lenders’ collapse has left investors with many unanswered questions. Sleuths have been tracking digital trails to try and piece together what happened to customer funds; as the bankruptcy proceedings progress, clues may begin emerging that may shed more light on these mysterious events.
The committee’s purpose is to maximize recoveries for unsecured creditors; but for that to occur they need input and guidance from them. Furthermore, an ad hoc committee also advises against potential acquisitions or recapitalizations without extensive input from creditors first.
FTX collapsed due to a series of disclosures, including claims that customer funds had been mishandled. Furthermore, standard financial reporting practices were absent and its liquidity metrics were precarious; customers may recover some of their money but its recovery will likely be difficult due to all assets belonging to FTX being combined together in one pot and possible attempts by criminals at fraud. In addition, customers may encounter phishing attempts.
Voyager’s bankruptcy
Voyager attracted nearly one million users who trusted it as a secure place to store digital assets and generate high returns. Customers were promised that their funds would be protected by the Federal Deposit Insurance Corporation – but now Voyager faces bankruptcy proceedings.
Problems for 3AC first surfaced in June when it became evident that 3AC had defaulted on a loan from Voyager and began liquidating its assets immediately; leading to the shutdown of both their website and app.
Voyager’s 100,000 creditors are now struggling to recover their funds, hiring lawyers in some instances and appearing before bankruptcy judges in New York to represent them. One customer told a Manhattan judge she had invested her savings into USDC due to Voyager’s advertised 9% yield but now cannot withdraw it due to withdrawal freeze restrictions and has suffered severe financial loss; she asked him for help in retrieving it from Voyager.
