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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
Lawyers for Voyager Digital say the bankrupt crypto lender will self-liquidate its assets and wind down operations after failing to clinch a deal on a sale to either FTX US or Binance.US.
The announcement, made in a court filing on Friday, comes 10 days after Binance US abruptly pulled out of a $1 billion deal to purchase Voyager Digital’s assets following a U.S. government intervention to block part of it. Before the deal with Binance US, the crypto had a deal to sell itself to FTX – a transaction that fell apart when FTX filed for bankruptcy protection in November.
According to the filing, Voyager’s customers will receive an initial recovery of 36% of their crypto holdings – an abysmally low recovery rate compared to both estimates of their recovery rate of 72-73% if either of the acquisition plans were successful, as well as recovery estimates for creditors of other bankrupt crypto platforms. Celsius’ creditors, for example, will receive an estimated 70% of their holdings.
The recovery rate could rise, according to the filing, if defunct crypto trading firm Alameda Research’s attempt to claw back $446 million from Voyager’s estate fails. In addition to reserving $446 million of the estate’s holdings for the Alameda suit, Voyager’s lawyers are also withholding an additional $259.6 million for litigation costs, administrative claims and assorted other “holdbacks.”
Creditors who have any of the 67 “supported” tokens, including bitcoin (BTC) and ether (ETH), stuck on the platform will be able to withdraw the allowable percent of their crypto directly. For those with any of the 38 “unsupported tokens,” including Solana’s SOL and Algorand’s ALGO, Voyager will liquidate everything and pay customers back with USD coin (USDC), a stablecoin.
Objections to the planned liquidation process must be submitted to the U.S. Bankruptcy Court of the Southern District of New York (SDNY) by May 15 at 4 p.m. ET (20:00 UTC).
Edited by Nikhilesh De.
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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
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Cheyenne Ligon is a CoinDesk news reporter with a focus on crypto regulation and policy. She has no significant crypto holdings.
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Voyager Digital, a cryptocurrency broker and asset management startup, has announced plans to liquidate its assets and wind down operations. In a blog post on Tuesday, the company laid out its plan to “cease customer engagements, wind down our operations, and shut down the Voyager business.”
The move comes after the company failed to realize its dream of a successful sale. In October of 2020, Voyager announced its intention to explore a sale that could fetch “as much as $200 million” in total value. But these plans were thwarted due to a combination of unfavorable market conditions and an inability to find a suitor.
Voyager is the latest in a string of cryptocurrency-related companies that have opted to shut down in the past few months, with numerous startups—including BitMEX, BitBay and Huobi—all announcing similar moves.
The process of winding down will be conducted in accordance with FINRA and SEC regulations, whereby the company will pay out customer accounts for any assets left with the broker. It will also begin the process of fully closing its accounts with market makers and other vendors.
Voyager founder and CEO Steve Ehrlich expressed his sadness at the news. However, he remained optimistic that “we were able to continue to provide customers with innovative and secure ways to invest in and access digital assets, as well as an expanding suite of financial products and services.”
From a customer perspective, the closure will have no immediate negative impact, as it has been confirmed that all customer assets and funds are safe. However, it will be interesting to see what impact Voyager’s closure will have on the cryptocurrency market, with many other companies opting to exit the space in recent months.
