Voyager Digital intends to self-liquidate its assets and cease operations. A petition was filed on May 5th, 2023. The filing was done in the United States Bankruptcy Court Southern District of New York (SDNY). This follows the failure to reach purchasing agreements with two firms- Binance and FTX.US.
This news comes ten days after the Binance.US deal fell through. Binance US recently withdrew from a $1 billion deal to buy Voyager Digital’s assets. This comes after the US government intervened to prohibit part of it. Prior to the agreement with Binance US, the company had a plan to sell itself to FTX. This deal also fell through when FTX filed for bankruptcy in November.
In July 2022, Voyager filed for bankruptcy when crypto hedge firm Three Arrows Capital (3AC) defaulted on a substantial credit position granted by the platform. Since then, the corporation has been figuring out how to restore assets to investors who used its services. FTX won the offer to purchase its assets in October 2022, a month before its own demise. Binance then made an offer to Voyager. Binance.US spent months attempting to persuade regulators to accept the purchase but encountered various difficulties. These objections from the Securities and Exchange Commission (SEC) and the country’s Committee on Foreign Investment.
According to the file, Voyager clients will now be able to reclaim 35.72% of their crypto assets. It is lower than the expected recovery rate of 72-73% if the Binance.US purchase plans had gone through. It was also disclosed that 38 “unsupported” coins, including Tron (TRX), Solana (SOL), Algorand (ALGO), Celo (CELO), and Avalanche (AVAX) cannot be withdrawn. Therefore, the coins will be liquidated and refunded to clients.
Those who own any of the 67 “supported” assets, such as Bitcoin (BTC) and Ether (ETH), will, on the other hand, be allowed to withdraw the maximum percentage of their holdings directly. The first recoveries are planned to commence in the coming weeks.
If collapsed crypto trading firm Alameda Research’s bid to recoup $446 million from Voyager’s estate fails, the recovery rate might grow. Furthermore, the attorneys for the Voyager are keeping a further $259.6 million for legal fees, administrative claims, and many other “holdbacks.” Objections to the intended liquidation must be filed with the same SDNY court by May 15 at 4 p.m. ET.
The partnership breakdown with the crypto behemoth Binance was considered a significant setback for the digital asset industry’s aspirations to establish itself in the United States despite a growing regulatory crackdown. Regulators like the SEC have recently cracked down on the crypto business. They have been issuing Wells notices to various crypto and crypto-friendly firms, referring to the industry as the “wild west.” The lack of proper rules and regulations has also led to ongoing turmoil in the American crypto industry.
