Voyager Digital to Start Repaying Frozen Crypto Funds After Court Approval
Bankrupt crypto lender Voyager Digital has won court approval to self-liquidate assets and start repaying customers a portion of their frozen funds.
On Wednesday, US Bankruptcy Judge Michael Wiles approved Voyager's liquidation plan at a court hearing in Manhattan months after deals to sell the crypto lender to FTX or Binance.US fell apart.
Users are expected to get about 36% of what they’re owed, far lower than the 72-73% estimated recovery rate they would have received if the Binance.US acquisition plans had gone through.
However, the recovery rate could increase if defunct crypto trading firm Alameda Research is unsuccessful in attempting to claw back $446 million from Voyager's estate.
Voyager's lawyers are also withholding further funds, including $259.6 million for litigation costs, administrative claims, and other holdbacks.
Customers who have any of the 67 supported tokens, including Bitcoin and Ether, stuck on the platform will be able to withdraw the allowable percentage directly.
However, a number of digital assets on the platform that cannot be withdrawn will be liquidated and returned to customers, which include major cryptocurrencies like Algorand (ALGO), Celo (CELO), and Avalanche (AVAX).
Voyager's official committee of unsecured creditors said that customers may be able to make withdrawals by as early as June.
Voyager customers expressed their dissatisfaction with regard to the liquidation, complaining about the bankruptcy cost, lawyer fees, and the partial return of crypto to users.
Judge Wiles acknowledged that nobody is happy with the liquidation, but said the wind-down is the only path forward.
“Hindsight’s 20/20. I’m sure everybody wishes that something better had happened. We are where we are, we’re
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