Voyager Digital Shows Intent with $474M Recovery Fund

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Voyager Digital is making good progress in its plan to repay creditors following bankruptcy. To boost its financial revival, the company has obtained approximately $484 million through settlements with FTX, Three Arrows Capital (3AC), and Directors and Officers (D&O) Insurance.

In a recent court filing to the US Bankruptcy Court for the Southern District of New York, Voyager Digital revealed that over 92% of the recovery fund originated from an arrangement with crypto exchange FTX. This equates to approximately $450 million. The funds from this settlement are reportedly sufficient to cover around a quarter of all creditor claims against Voyager, and will be distributed soon.

Instead of the FTX deal, Voyager Digital is additionally pursuing a claim worth around $675 million through ongoing legal proceedings against 3AC. So far, they have obtained $20.43 million as their portion of the initial payout from these proceedings.

Yet, Voyager may require additional payments as more assets are sold and more lawsuits result in settlements.

Through D&O Insurance, Voyager has secured a mediation agreement for approximately $14.35 million. This amount will be added to the pot for creditor compensation.

Voyager Digital Still Faces Challenges

Voyager has made significant progress toward financial recovery, but challenges remain. For instance, there are approximately 270,000 uncashed checks in their system, equivalent to around $17 million in unrealized funds. The majority of these checks hold values under $25.

Regarding the matter at hand, Voyager has made a move by setting a cut-off date of April 20th. Any checks left unclaimed by this time will be rendered invalid according to their announcement.

An additional concern is the data breach, which affected some creditors’ information. Nevertheless, Voyager is actively addressing this matter. In collaboration with security specialists, they have pinpointed the cause of the breach as investigations carry on.

In July 2022, Voyager made the filing for bankruptcy protection under Chapter 11 as the cryptocurrency market started to plunge.

In October 2023, the US Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) simultaneously filed lawsuits accusing Stephen Ehrlich, former CEO of Voyager, of making deceitful statements.

In May 2023, Voyager announced that its customers would be able to recoup 35.7% of their claims using crypto or cash as part of its restructuring plan. However, by November, the crypto exchange reached an agreement with the Federal Trade Commission (FTC) to provide $1.65 billion in financial compensation.

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2024-04-11 14:33