US bankruptcy court approved Voyager’s liquidation after failed Binance takeover
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A US bankruptcy court has approved the liquidation plans of the bankrupt crypto lender, Voyager. The court has allowed the lender to end its Chapter 11 bankruptcy reorganization efforts. Voyager was among the crypto firms that filed for bankruptcy last year following an intense bearish market.
US court approves Voyager liquidation
According to a Reuters report, the liquidation was approved by Judge Michael Wiles at a hearing in Manhattan. The crypto lender had already announced its plans for liquidation after failing to secure a takeover deal with exchange giant Binance.
The lawyers had earlier said that the firm would self-liquidate and halt its operations after failing to secure a $1 billion deal with Binance US for the purchase of the lender’s assets. Binance US, the US division for the Binance exchange, said that its decision to back out of the deal was caused by a “hostile and uncertain regulatory climate in the United States.”
Voyager filed for Chapter 11 bankruptcy protection in July 2022. The lender’s bankruptcy filing was triggered by the collapse of the Terra-Luna ecosystem in May last year, which affected the global cryptocurrency space.
Voyager not only had exposure to Terra, but it was also exposed to the failed hedge fund Three Arrows Capital that also filed for bankruptcy. Before filing for bankruptcy, Voyager had sent a notice of default to Three Arrows Capital over the failure of the hedge fund to settle a crypto loan valued at more than $670 million.
Three Arrows Capital was affected by the collapse of Terra and the downturn across the entire crypto market. The crypto hedge fund was ordered by a court in the British Virgin Islands to liquidate its assets.
Voyager was on the verge of being rescued from bankruptcy in September last year. At the time, FTX US secured a $1.4 billion deal to acquire the assets owned by Voyager Digital. However, this deal failed to materialize as FTX filed for bankruptcy shortly after.
Voyager expects customers to get a 35% refund
As part of the liquidation plan, the bankrupt crypto lender also wants to return some of the funds owed to customers. In the new court filing, Voyager Digital has said that customers expect to be refunded around 35% of the crypto deposits they have on the platform if the liquidation plans go as expected.
The Reuters report said that the approval granted by Judge Wiles for liquidation allowed the bankrupt crypto lender to return around $1.33 billion worth of crypto assets to its customers. The recovery will be notable to the crypto investors that have lost money from multiple bankruptcies, including Voyager, Celsius, Three Arrows Capital, FTX, Genesis, among others.
The bankrupt FTX exchange is also making efforts for asset recovery. The exchange requested the bankruptcy court to allow the recovery of around $445.8 million worth of loan repayments made to Voyager before its collapse. If Voyager wins this litigation, it will increase the funds customers can recover to 63.74%.
