• Voyager Digital has received approval from a U.S. bankruptcy court to start liquidation procedures and return assets to customers.
• The Chapter 11 plan will go into effect on 19 May, with the initial distributions expected before 1 June.
• Customers will receive just 35% of their original claim amount since the bankruptcy estate is holding back over $700 million.
Voyager Digital Bankruptcy Approved
U.S. bankruptcy court has approved Voyager Digital’s chapter 11 plan, allowing the crypto lender to start liquidation procedures and return its remaining assets to customers. The initial asset distributions are expected no later than 1 June, 2023.
Liquidation Process
Judge Michael Wiles stated that liquidation was the best course of action for Voyager given that it didn’t have enough assets to fully repay its customers. The Plan Administrator will take control of the Wind Down Debtor once the plan becomes effective on 19 May, with initial distributions made before 1 June as per the roadmap shared by Voyager.
Repayment Amount
Customers of Voyager Digital will receive just 35% of their original claim amount since the bankruptcy estate is holding back over $700 million for preference claims related to FTX and Alameda Research, wind down costs and litigation reserve, and administrative claims respectively. Currently, there’s a little over $1 billion in assets available for repayment from which $629 million are allocated towards customer repayment claims only.
Customer Displeasure
Judge Wiles acknowledged customer displeasure with his overseeing of Voyager’s Chapter 11 proceedings but reiterated that liquidation was the best way forward given current circumstance faced by the crypto lender at that time.
Next Steps
The bankrupt crypto lender is currently working out details for repayment distribution among its customers while aiming to make these initial payments before 1 June this year.