Recent cryptocurrency collapse has sent shockwaves through the industry, leaving investors bewildered at halted withdrawals. Some may have received news that their funds may never return from Voyager due to bankruptcy filings and bankruptcy being declared imminently likely.
Voyager Digital announced on May 4 that it is set to liquidate its assets, with partial withdrawals for creditors anticipated within a few weeks.
The Future of Crypto Lending
Not unlike bank deposits insured by the Federal Deposit Insurance Corporation (FDIC), crypto deposits on centralized lending platforms like Voyager remain unprotected and vulnerable to theft. Voyager’s bankruptcy underlines the need for greater regulatory oversight to establish minimum standards of safety and sound operations while helping retail customers better understand how their funds are stored and protected, what their legal claims to those funds under normal and exceptional circumstances are, as well as what may happen if they overlook fine print regarding rehypothecation agreements.
Voyager Digital’s massive exposure to failed crypto hedge fund Three Arrows Capital caused it to temporarily cease withdrawals and file for Chapter 11 bankruptcy protection last year, prompting customers to wait in anticipation for their money to return. Recently, Voyager Digital tweeted that creditors can expect initial distributions of both cash and crypto within weeks.
Voyager Digital’s bankruptcy proceedings continue, yet the company has secured new partnerships that could enhance its profile. Most recently, they announced a partnership with Fundstrat – a research boutique led by Wall Street strategist Thomas Lee and veteran sales executive John Bai – to provide cryptocurrency market intelligence to Voyager customers.
Voyager Digital also recently formed a partnership with the Dallas Mavericks to increase cryptocurrency adoption, working together on educational and community programs, global activations activities and fan engagement promotions. Voyager Digital will have exclusive naming rights for Mavs Gaming Hub which serves as the official gaming and event space of NBA 2K League team.
Voyager Digital remains confident of surviving its bankruptcy proceedings and moving into a bright future, according to CEO Steve Ehrlich’s estimation that one billion people will have cryptocurrency exposure by 2025 and that Voyager’s influencer-based marketing approach will attract more users onto its platform.
Voyager Digital has also incurred substantial fees during its Chapter 11 bankruptcy proceedings that may be passed on to customers, such as financial and legal advisory fees. Furthermore, Voyager continues to communicate with regulators to clarify any statements which are misleading or inaccurate as well as to facilitate a mutually acceptable regulatory framework for the cryptocurrency industry.
Voyager reserves the right to refuse execution of Customer orders or close open positions if it determines they violate applicable laws, rules or regulations, violate fair dealing principles; cause abnormal market conditions that disrupt trading of underlying securities on our Market; disrupt normal market operations prematurely or breach other reasonable risk considerations.
Customer agrees to provide Voyager with all information required for identification and compliance with federal and state regulations to prevent fraud, money laundering, or terrorist financing – this includes providing proof of identity and address as well as copies of government issued photo ID or passports.
Voyager customers with funds in their wallets would see those returned under this plan, in addition to proceeds from 3AC’s ecovery, shares in the newly formed firm and Voyager crypto tokens valued up to an estimated total of around $1.31 billion depending on current market prices.
Voyager had filed for Chapter 11 protection in July due to volatile markets and default on loan agreement to crypto hedge fund Three Arrows Capital (3AC). Subsequently, trading, deposits, and withdrawals were suspended.
Voyager was still able to return approximately $1.3 billion to its customers according to court filings, though full recovery depends on litigation with FTX who seek to claw back $445 million loan repayments made prior to Voyager filing for bankruptcy protection. A new app features news feed and detailed coin info including price chart options over time.