Faced with the turmoil that is shaking the crypto universe, the noose seems to be tightening for Voyager Digital. The company, once a flagship of cryptocurrency lending, is on the verge of liquidation which could begin as early as this Friday. At the same time, a glimmer of hope remains for its users who could begin to recover part of their investments as early as June 1.
The paradox of brilliance and failure
Founded in 2017, Voyager Digital has gone through a real journey of the cross. The collapse of the Terra Luna ecosystem and the implosion of crypto investment fund Three Arrow Capital have put the company to the test.
At the time of its declaration of bankruptcy last July, Voyager Digital held approximately $1.3 billion worth of cryptocurrencies. In addition, he had $350 million in cash at the Metropolitan Commercial Bank.
The company’s assets and debts ranged from $1 billion to $10 billion, with over 100,000 creditors to its credit.
Traveling is no exception in this financial storm. Indeed, the year 2022 has seen a real explosion in the cryptocurrency market. This growth was notably stimulated by the COVID-19 pandemic.
However, faced with this volatile dynamic, many cryptocurrency lenders, including Celsius Network, BlockFi, and Genesis Global Capital, filed for bankruptcy.
Voyager Liquidation: The Details
A bankruptcy court judge gave his approval to the Voyager liquidation initiative during a hearing on Wednesday.
The move comes ten months after Voyager filed for bankruptcy protection in the Southern District of New York bankruptcy court.
Once the process is started, the recovery of funds by customers may begin as early as June 1.
Reimbursement to customers will be partly in cryptocurrencies, the same type that they held in their accounts. For deposits in unsupported cryptocurrencies, redemption will be made using the USDC stablecoin.
Voyager predicts that customers will initially be able to recover nearly 36% of their receivables, although this percentage may increase depending on the success of litigation between Voyager and FTX.
In the turmoil of the cryptocurrency markets, Voyager Digital is navigating troubled waters. If the future remains uncertain, one thing is certain: the liquidation of Voyager opens a decisive chapter for its creditors and for the future of the platform. The crypto universe will, without a doubt, be attentive to the turn of this crucial event. While Voyager goes to great lengths to satisfy its customers, FTX executives are not shy about openly criticizing the exchange platform.
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