Table of contents
The US bankruptcy court in New York has just authorized Voyager Digital to compensate its users. $ 270 million.
A bankruptcy judge awarded $ 270 million in damages.
The company has lost access to its funds since filing for bankruptcy moving on to chapter 11 last July. A troubled company can file for bankruptcy under Chapter 11. This effectively leaves the judiciary to manage the debt between Voyager and its creditors. Therefore, your assets are protected. However, the company can continue to operate as usual and enter into agreements with its creditors. According to the bankruptcy filing, their number is more than 100,000. In return, Voyager Digital is required to keep the bankruptcy judge informed of the progress of cases with its borrowers.
Judge Michael Wiles, who was involved in the case, eventually allowed the exchange to access its assets to recover $ 270 million from its clients. According to Wiles, the company has created a “sufficient foundation”. to support your request for access to your deposit account on behalf of clients (FBO) at the Metropolitan Commercial Bank.
At the time of filing for bankruptcy, the company had approximately $ 350 million in cash. Besides, it would be too $ 1.3 billion in digital assets available on the stock exchange. According to Stephen Ehrlich, CEO and co-founder of Voyager, the purpose of filing for bankruptcy was “to maximize value for all stakeholders and especially customers.”
Partial refund only for now
While MCB now has the power to return that money to Voyager customers, the court has yet to decide what to do with over $ 1 billion worth of cryptocurrencies. This is the first step towards unlocking user resources. by Voyager Digital. However, this is only a small compensation compared to the assets blocked on the platform and, depending on the progress of the bankruptcy procedure, they will eventually be used to repay the debt to creditors.
Specifically, the company claims that the customer’s money is not lost, but locked in the bank. Voyager Digital explicitly stated in its restructuring plan like every customer “comes back”. Client funds consist of cryptocurrencies and funds raised by 3AC (the largest lender). They are complemented by the company’s stock after its restructuring and Voyager’s native tokens.
Despite Voyager’s July 11 announcement that funds will be returned to users:
Client funds belong to you and will be returned to you after verification and fraud prevention. All client funds are held in a client account with the Metropolitan Commercial Bank and contain the same amount as the funds in Voyager accounts.
There is a strong possibility that Voyager customers do not return all your deposits.
trust the lowest
Another claim that can be called misleading for the platform. Indeed, the cryptocurrency company was accused of this a few days ago. lied that she and her clients were FDIC insured. The Federal Deposit Insurance Corporation (FDIC) is an independent agency established by Congress. It aims to maintain the stability and confidence of the public in the national financial system. The FED and FDIC accuse Voyager of making “false and misleading” claims. On their website, app, and social media, they informed customers that their funds were government insured.
In the meantime, it is hoped that news of a partial repayment will help restore investor confidence. They have no choice but to wait and hope that one day they will return all their wealth.